Benefit of cryptocurrency — Introduction
Cryptocurrencies are already part of the daily news in journals, magazines, newsletters from social networks, and mostly any other information platform. Very often we hear about the rise of the value of certain coins, about the price drop, as well as about how this kind of investment has changed the life of many people.
However, even with all this information flood about cryptocurrencies, we find very little information about all the social and economic transformations triggered by the creation and large use of cryptocurrencies.
You may have noticed that every news about crypto market are either focused on the up and downs of the market, or in repeating the price of the most valued coins. Very often we find headlines such as “Crypto X just created Y novel millionaires”.
All this naturally works as an effective way of attracting and creating new investors of the crypto market. The problem, however, is that other aspects of these assets end up neglected and not known by the general public.
Cryptocurrencies are much more than an asset of investment, like stocks and treasure bonds, they represent a true technological and social revolution, with potential to bring important changes to our lives.
For this reason, in this post we will explore the social side of the crypto revolution and talk about all their socio-economic benefits. You’ll understand more about the political and economic ramifications of the crypto market and how the invention of cryptocurrencies can bring benefits never imagined in the history of mankind. Check it out!
The political benefits of cryptocurrencyes
Certainly you have seen in the news some economic decision made by someone from the government, usually the secretary of the treasure, as a strategy to avoid the price drop of the currency.
Decisions of this kind are always based on the fluctuation of various indexes of the market and on different factors that can influence the final value of the currency adopted by a given country.
This reveals that all organizational structure around the value of money is completely hierarchical, i.e., organized in a vertical mode. In hierarchical structures, the value of the money adopted by a country is influenced by the decisions carried by a central agent located at the top of the hierarchy.
In general, these agents are central banks, the secretary of the treasure, as well as certain institutions responsible for controlling the economy. If you’re a little a curious, you’ll certainly ask: and how can we guarantee that the best decisions will be made to keep the value of the money?
The truth is there is no way to guarantee that. In fact, what really happens is that we are always trusting that the elected president (or governor responsible for this issue) will choose the best people for each important position in the economic hierarchy, and that each of these people will take the best decision for the general public.
It is important to note, however, that this is not the result of a particular politician, or even a political party or any other political agent. All this is a consequence of the very structure of our economy since it depends that certain agents will take the adequate decisions to control and forbid a wide range of phenomenon that can cause side-effects on the currency.
The end result makes the value of our money completely vulnerable to political negotiation. As we know, the choice for certain position is frequently made under heavy negotiations with other political parties.
And this is where the importance of crypto becomes even more evident. One of the central aims of cryptocoins, especially after the birth of Bitcoin, is to create the independence between the value of our money and the political or governmental decisions. (If you want to know more about the benefits of Bitcoin, check the this link: )
Cryptocurrencies have a decentralized organizational structure, i.e., there is no organization, institution or any hierarchical structure that take all final decisions that affect the final value of the coin.
(Nowadays, there are some cryptocoins created and managed by public or governmental institutions in other countries. Therefore, for these coins the decentralized structure does not apply. However, it is of importance to highlight that coins like these are still exceptions in the crypto market.)
This means that there is no person responsible for taking decisions about the rise or decrease of certain market indexes that can affect the value of a currency.
The organizational systems of cryptocurrencies are completely autonomous and influenced only by the natural fluctuations of the market. There is no person that can take one political decision and directly affect the value of Bitcoin or the biggest share of cryptocoins.
This shows that the value of a cryptocurrency is something completely independent of political and governmental interests, a characteristic that is is very different from our money.
The biggest result is a greater freedom and autonomy in the process of wealth generation. People become more free to pursuit their interests without the possibility that their wealth may find some obstacle in political structures and bureaucracies.
The central motivation for most investors and enthusiasts of the crypto market is the possibility to develop an independent, autonomous and self-organizational economic system, open for multiple values, currencies and goals.
In general, we can highlight the following political benefits allowed by the creation and consolidation of the crypto market:
- Development of an organizational structure independent from the political structure;
- Horizontal and decentralized organizational structure rather than vertical and centralized;
- Protection of the currency against bureaucracies and political interests;
- Autonomy of organization to the economic system;
- Among others.
Interested in learning more about the history of cryptocoins and their benefits? See this post.
All this also brings countless consequences to the economic structure of modern economies with benefits that find many social implications. We shall talk more about these benefits in the next section.
The economic benefits of cryptocurrencies
Before learning more about the economic benefits of the crypto market, it is necessary to understand more about the role of central banks to the control of a country’s currency.
Every money issue, from interest rates relative to credit, to the fees charged by financial institutions, as well as various other economic transactions in our everyday lives, are directly controlled by a central bank.
Not only that, the central bank is also responsible for defining rules and guidelines that ought to be followed and adopted by all other banks of the country.
As we’ve said before, the goal of this control is to protect the value of the currency and, with this, to avoid bigger problems and economic disasters. The problem, however, is that all this hierarchy depends on countless bureaucracies and the general interests of the agents on the top.
Thus, the invention of Bitcoin, along with the blockchain systems in general, seek to provide a greater autonomy to the currency with the goal of protecting their users from all the bureaucracies and complexities that are inherent to regular money. (You don’t know what blockchain is? Learn it through this link. )
With cryptocurrencies, all decisions about your money are entirely yours. The value of the currency may vary, but not due to political decisions alone.
There are still other important benefits to the economic structure. Some of the central ones are:
- Bigger competition due to a higher number of assets. The crypto market feeds the competition among distinct assets through the creation of new coins with different technologies and market proposals. This provides a bigger freedom to users and investors, since now they can choose, invest and use the coins that better fit their n As we always hear: with bigger competition, we gain more competition for improvement and quality, as well as a greater freedom of choice;
- Digitalization and universalization of money. Another important benefit of crypto is a modern use of money through currencies that are universally accepted;
- Security and protection. There is also a bigger degree of security and protection provided by crypto systems, like blockchain. These systems became popular due to their autonomy of organization and higher security of data transactions and other important financial information;
- Cheaper fees. The decentralization has the effect of eliminating a number of intermediates between financial transactions. As a consequence, transaction fees for cryptocoins are usually cheaper in comparison to the usual assets. Bank fees, especially, become non-existent;
- Autonomous organization of the monetary structure. Among all economic benefits provided by cryptocoins there is no doubt that the most important is the creation of an autonomous organization to the monetary structure. This means that there are no politician or any other political agent capable of controlling the destiny of the money. Therefore, the financial system becomes an organization in which the individual are free to self-organize and act in accordance with their own values. (Would you like to learn more about the benefits of cryptocoins? Check the this post.)
All these features have many consequences for the very structure of our society. Based on this, we can say that there are many social benefits provided by the invention of cryptocurrencies.
The social benefits of cryptocoins
The first social gain resulting from the use of cryptocurrencies is the increase in social and political freedom. There is a gain in freedom not only at the economic side, as we spoke previously.
Therefore, there is a good gain in the total freedom provided to the individual. Every citizen gain the right to choose the currency that prefers and that better fits her own values. Moreover, the cryptocurrencies provide a bigger degree of security of financial data to their users. This security does not come from the government, but rather from a system of autonomous protection and capable of protecting its users.
This may protect the money of the citizen even from the government and attempts of seizure from the state. Thus, cryptocurrencies generate a bigger safety to wealth generation since every individual feels that its capital is protected against arbitrary actions from third parties.
The fact that cryptocurrencies are digital currency of high security and easy transaction also facilitate their democratization and use by various classes of society. It is possible to manage, buy, and sell crypto via mobile alone.
Decentralized systems promote the active participation of their users. Think, as an example, in a cryptocoin like Cardano (ADA). One of the main goals of this coin is to promote the democratic participation in all decisions about the system. (If you’re curious about the Cardano Project, there is a helpful guide here.)
This means that all decisions about the Cardano system are not unilateral. They’re made by a team of experts with support from the users. This kind of organization and participation will become even bigger in the crypto market.
In general, a cryptocurrency does not represent only a financial asset. Each coin represents a worldview and a set of values that are part of the proposal of its creators.
Hence, differently from state currencies, which are imposed to the population and managed by decisions in which the general public has no active role, the cryptocurrencies bring proposals that may be adopted or not. People have a total freedom of choice. (If you want to learn more about the social role of cryptocurrencies, check this text.)
Benefit of cryptocurrency — Conclusion
Much has been said about the high value of cryptocurrencies, especially of currencies such as Bitcoin and Ethereum, as well as of how cryptocurrencies create overnight millionaires and made many investors to earn a lot of money.
However, we still hear too little about how cryptocurrencies might change the life of other people and bring many important social transformations. The crypto market provides many social, economic, and political benefits.
In order to remind you of all that has been said, we highlight the central points of the text:
- The cryptocurrencies have a decentralized organizational structure, as opposed to the usual currencies adopted by a country, which has a hierarchical organizational structure;
- This means that governmental and political decisions do not affect, in the long run, the final value of the currency.
- The value of a cryptocoin may even oscillate due to natural economic phenomenon, but not due to a decision made by some person or institution that has control over certain fees and indexes of the market;
- The absence of control created by decentralization allow for diverse political benefits based on the independence between the government structure and the economy;
- This makes possible the creation of an autonomous and self-organized economic system;
- Among the biggest political benefits, there is the creation of coins protected from political interests and bureaucracies, features that guarantee the generation of wealth, especially among the poorest;
- Among the economic benefits, there are many important ones, such as the creation of a greater competition due to a higher number of financial assets, the universalization of the currency through digital media, and even the elimination of bank fees of financial transactions;
- Among the social benefits of cryptocoins, there are also important points, such as the protection of wealth against arbitrary political decisions and the creation of a decentralized system, which promotes the active participation of the citizens in economic matters.
If you have never heard of all the consequences and social benefits provided by the invention of cryptocurrencies, this post is the right place for you to understand more about this evolution triggered by this movement of development of digital currencies.
If you are interested and want to know what to do to start investing in the cryptocurrency market, be sure to follow the content on our blog!
