A New Era of Financial Digitalization

November 11, 2021 by No Comments

                With the rise of decentralized, digital currencies being used for remittances and a growing list of merchant-accepting companies, a new era in financial technology has been born.

             Digital currency is a form of money that exists purely as computer code. It can be sent from one person to another without going through a third party such as a bank or other financial institution. In many ways, it is similar to digital cash, but it can also operate like stock, owning fractions of specific states within the code itself. There are no physical ‘coins’ associated with this kind of currency; all you have is the record on whatever database acts as its public ledger which tells you how much each unit is worth at any given time and who owns it.

             A decentralized currency, digital or otherwise, is extremely valuable to the global marketplace because of its lack of regulation. There are no ‘charge backs’ in a bitcoin transaction; once you send someone bitcoins they cannot take them back out again, and it is completely anonymous. This means that anyone in the world can make a purchase from any other person with nothing more than their internet connection and an electronic wallet (analogous to your physical one). The buyer and seller don’t need to know anything about each other; all that matters is that they both have access to the internet. And since there are roughly 2 billion people in this world who meet this criterion (and less than half of those actually use their accounts), there’s much room for growth in the digital currency market.

             This decentralized nature also gives users an unprecedented amount of control over their own finances. You don’t need to ask permission from anyone else to start using digital money; all you have to do is set up a wallet and connect it to the internet. There are no regulations, so you can spend your funds however you like without fear of getting hit with fees or having regulations unexpectedly changed halfway through the month (as many people experienced during Cyprus’ banking crisis). It doesn’t matter where you’re located, how much money you make, what kind of bills you pay…you just send yourself bitcoins and see what happens.

             Governments worldwide are starting to recognize that this new form of finance cannot be ignored. In fact, several nation-states have already started to recognize it as a legitimate currency and take action accordingly. Some countries, such as the United States, are very hesitant about keeping up with this rapidly evolving market and taking proper regulatory measures that would allow digital currencies to proliferate smoothly amongst the citizenry. But these types of regulations could open doors for greater levels of economical freedom worldwide.

             There is much debate over whether or not bitcoin will be able to make a significant impact on the overall world economy, but one thing is certain: there’s never been a better time in history to get involved in digital currency investment.

             Because digital currency is decentralized from a central government’s control, it has been at the forefront of controversy for its alleged use in illegal activities such as the purchase and sale of illicit goods on black market sites like Silk Road, where people can buy anything from drugs to guns using bitcoins as their currency. The U.S. Treasury even went so far as labeling bitcoin a legitimate financial service back in 2013 due to the fact that it could be bought and sold much like stocks or bonds. This was a significant step forward for cryptocurrency advocates, since just a few years ago calling bitcoin a ‘currency’ would have resulted in you being branded insane by those who knew better because there was no actual application for its use besides underhanded dealings on the darknet.

             Now that ‘legitimate’ digital currencies are gaining ground in the world of finance, they have hit a new milestone in public awareness and credibility. Digital currency payment processors like BitPay allow any business to accept bitcoin as payment for their goods or services with very little hassle, something unheard of just last year. As this becomes more widely accepted by both merchants and consumers alike, one can only hope that it will be easier to convince people that these forms of money are not just used by criminals or hackers but instead are becoming an integral part of everyday life.

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