Should I Care About Cryptos?
Maybe, you should. Or maybe, you shouldn’t. The bottom line remains that cryptocurrencies are here to stay and your feelings about the longevity of their benefits is negligible.
The tailend of the year 2020 and the early days of 2021 saw the crypto market undergo massive bull runs. Major cryptos like Bitcoin and Ethereum saw over 400% rise in their market values. Timelines on social media platforms were never short on content about people converting their real-world assets into crypto assets. This situation reinforced people's faith in cryptos leading to a high demand for them.
Because of this frenzy, people overlooked the real reason why cryptos have gone from being insignificant in 2009 to being significant now. That reason is The Blockchain.
The emergence of Blockchain technology signalled a new way of sending and receiving funds between two people in different parts of the world without the involvement of a third party i.e the banks. The characteristics of this new way of making transactions was a welcomed fix to the underlying issues associated with traditional banking systems. Transactions done on the Blockchain can now be:
- Carried out in an instant without the need to wait for days.
- Anonymous: No one can connect your real world identity to your address.
- Secured because you are the only one in control of your funds.
- Permissionless: There are no restrictions to the amount of funds you want to use in a transaction.
- Irreversible: Funds sent will always arrive at the destination address.
While the adoption of cryptocurrencies as a means of exchange is still facing some challenges, it’s potential as a store of value is not up for debate. Why? Because investments in cryptos have yielded massive ROIs. Bitcoin is a classic example in this scenario.
To further make a case for everyone to own cryptos, there are advancements and innovations been made in the world of cryptocurrencies. The Ethereum Blockchain has provided us with the ability to develop and implement what we call smart contracts.
According to Investopedia "A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network". Basically, it means someone can program payments to be made automatically once a confirmation that the terms of the contract have been met. If one of the parties defaults, payment is withheld.
There is also the recent rise of decentralised finance(DeFi), a protocol that easily allows crypto owners to collect loans while using their crypto assets as collateral. Interests can also be made on crypto assets locked in the DeFi protocol over a period of time.
In conclusion, cryptocurrencies and the Blockchain technology powering it are challenging the rigid structures that our traditional banking systems have exposed us to over the years. Financial inclusion for everyone now looks like an achievable feat.
When next the question "Should I Care About Crypto?" arises, you now have enough information to make an educated decision.
Remember to do your own research before attempting to buy and use any cryptocurrency.
