Some time ago it was hard to imagine that we could live in a world where we’ll buy and sell things without fiat money. In a world where we can do transactions any time and from anywhere, we want and it can be for free. Crypto currencies become immensely popular over the past years.
“How do cryptocurrencies become so popular in a short period of time?” It is the question of the 21st century.
It is quite chaotic. First, it was just enough to buy a pizza, then it grew as a lot of people started to believe in the system and make investments, then celebrities started to promote it. Then also more sites started to accept crypto to increase the popularity of their format. Long story short, it started from small steps but now cryptocurrencies are on the wave.
Central banks don’t approve cryptocurrency. I guess in general it is understandable why they don’t like it. Nobody likes its opponents. As much as the popularity and the use of cryptocurrency grow that much the use of banks is receding into the background.
Banks especially central banks like to have control over the transactions, money circulation, etc., but they can’t control cryptocurrency and that’s why it is so irritating for them.
Let’s see why exactly central banks don’t like cryptocurrency.
Advantages of Crypto
- The easy transaction is the thing that cryptos have and banks don’t. You can do transactions of crypto with your computer or smartphone in a moment. You don’t need to wait for banks’ approval or workdays. You don’t have to pay taxes or any fees. Cryptos are free, easy, and fast.
- The existence of a blockchain (a public list) records every transaction. So, people can’t claim that they have the coin without having it. Everything is recorded and can’t be deleted.
- Cryptos are secure and private. You can never worry about being decoded. It is great for those who seek privacy, which can’t be often found in ordinary electronic transactions.
- Cryptocurrencies are mainly decentralized, which is a huge advantage of cryptos. Cryptos are controlled by developers using it. The decentralization keeps the currency monopoly free, so nobody and no organization can have control over it.
Disadvantages of Crypto
- Your crypto can be stolen, remotely. Or it is possible to lose your virtual wallet. If you lose your private key to the wallet, you can assume that there will never go back to it. It will be locked away forever and you can use all your crypto.
- The crypto market is not regulated by the Financial Conduct Authority (FCA) so you can’t protest against anybody. There are no rules, that’s why central banks can’t like the cryptosystem.
- They are vulnerable to cyber-attacks and scams. Scammers can use social media to trick people into making investments.
So, we can see that there are a lot of places and chances of a crime that the central bank can do nothing about.
The advantages and disadvantages of crypto currencies are changing in a short period of time. Every day you can find something new about cryptos if you keep up with crypto news. Central banks are trying to control the situation in the financial world and cryptos are threatening the system that was there for so many centuries.