By following cryptocurrency latest news today, you certainly come across various new updates and developments related to price rise and many other things that are surrounding the cryptocurrency world. Today, cryptocurrencies have become a popular financial technology that has made people all around the world to engage in sending transactions and trading digitally. But has your curiosity pinched you about the relevance of cryptocurrency for trading? Well, if not, then we are going to discuss the importance of this digital concept, and what sets it apart from other financial assets.
The question of the relevance of cryptocurrency for trading has triggered not only among the budding crypto enthusiasts but to many economists and business entrepreneurs. They are curious to know about the speciality of this digital concept over fiat currencies that have been regular financial use for decades. Bitcoin, the most well-known global cryptocurrency doesn’t require any special introduction now. This crypto coin is the brainchild of mysterious developer founder, Satoshi Nakamoto on 3rd January 2009. Bitcoin rose to fame during the financial disaster in 2009-2009. So naturally, it will ignite the inquisitiveness among each of those who are experienced or newly introduced to this digital field. But besides remaining to our main subject, let us venture into the era to know the root of paper money.
Dawn Of Paper Money In Ancient Time
Paper money is part and parcel of our life which is needed daily for trading and purchases (buying and selling) but never knew about its origin. Paper money is not new to us; it has been for many decades. The recorded use of paper money can be observed around 1000 AD ancient China. At that time the Chinese government analyzed the worth of paper money over minted coins. It seemed very simple for distribution and was cheap to produce. The dawn of the new financial era was about to begin. The trend of cryptocurrency for trading came so much after a long decade.
What Is The Money?
Before the concept of cryptocurrency for trading, we all grew up with a notion of money as a paper printed by the government. Economists of today’s contemporary era, accept the fact about money with its 3 features:
Medium Of Exchange
When there is a better medium of exchange, then there will be no problem in getting transferred between buyers and sellers, and to be used again for the upcoming transactions. As for an example, corn cannot be considered as the right medium of exchange, because it needs a bigger storage amount, which is much complex to manage. Also, it gets rot soon. Other than paper money, coins have also get along well traditionally. Their small size describes the advantage of being carried easily.
Store Of Value
There can be no value without a limited supply of money. That is the reason for the collection of scarce commodities like gold jewellery art or wine.
Unit Of Account
There is a need for a strong accounting system for money in storing balances, either positive or negative when the exchange of goods and services takes place. This works well in the case of the system of cash when the debiting of your money is done after credited with good and service. But in case of cryptocurrency for trading, it is necessary for fair transactions of credit or debit, or else it will lead to the system shut down.
Weakness Of Paper Currency
Because of some flaws found in a paper currency like the role of a middleman. To maintain a sound revenue standard, you are completely dependent on banks or government. There are countries like Sweden when cash is insufficient, the societies leave all up to middleman.
Importance Of Cryptocurrency In Trading
Now from here, cryptocurrency in trading takes a big stand by enabling users to trade or do any transaction without depending upon middleman. This comes opposite to paper currency. Bitcoin has a stronghold in possession of sound money. This cryptocurrency comprises a store of value with limited supply. Bitcoin truly deserves to be the finest medium of exchange. However, in local circumstances, physical cash is more useful than it. But Bitcoin fares better than cash in terms of sending globally in very short time duration.
Risks Involved In Cryptocurrency
Besides benefitting users with its digital features, cryptocurrency in trading also face risks like money laundering, hacking, robbery, and scams. So it does have its share of disadvantage or call drawbacks that negatively impact the public at large. Acceptance at a bigger level, scalability, and usability are some of the major factors that developers face as a challenge.
If you are abreast of crypto educational news, then you must be getting to know all the recent updates about cryptocurrency for trading. But besides this, some developmental steps are being taken by Bitcoin to resolve major issues that have been prevalent in the fiat economy since the ancient period. No matter how successful the concept of cryptocurrency has become, it is still a newbie concept surrounded by a volley of questions more than answers. The more important is to judge the relevance of cryptocurrency in the time of the financial crash. This is a question which we must ask ourselves after being experienced in crypto trading, on whether we can imagine trading without cryptocurrency?