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Things you need to know about cryptocurrency

Things you need to know about cryptocurrency:

Cryptocurrencies since they were born in 2009 with bitcoin as a pioneer, have become a true financial means: to make purchases, investments, payments, transfers and any type of transaction. If you still have doubts about the use of cryptocurrencies, but you are interested in knowing more about how much you have heard them name lately, then this article will be very useful. The value of cryptocurrencies is not in a physical asset but is of the fiduciary type, that is, it is based on the trust of the people who transact with them and the more transactions there are, the more trust there will be.

Transactions are faster than traditional bank transfers

Unlike conventional bank transfers and operations, cryptocurrency transactions work more transparently and quickly. Although the time of each transaction varies between each type of cryptocurrency, in the end it ends up being less than the “average time” of traditional bank transfers.

Fees and taxes are minimal

Normally, transactions that are carried out internationally have high fees, some of them even have to pay certain taxes, there are also cases of other digital payment systems that have significant costs. In the case of bitcoin and other cryptocurrencies, the transfers that are made have a minimum cost (which is around 1% approx.) Which is lower compared to other online payment methods on the market (for example PayPal charges a transaction fee of 5.4% plus USD 0.30 if money is received for goods or services).

There are no intermediaries in the transaction

Each operation you carry out with cryptocurrencies only occurs between the initial user and the end user. To better understand this, you can review the previous article entitled What are smart contracts? Where we explain how this represents an advance and a revolution in the way of seeing the economy and the way in which businesses are managed (for example Ether is the financial unit of blockchain technology Ethereum and works under this modality of smart contracts).

As cryptocurrencies have positioned themselves worldwide, experts and investors have begun to see them as a “safe haven” asset, similar to gold, which in times of crisis would maintain its purchasing power, however, this did not happen.

The drop in the price of oil, the fall in the stock market, plus the global consequences in the industry due to the appearance of the coronavirus, also triggered a sharp decline in Bitcoin. From exceeding $ 10,000 a few days ago, it fell below 8,000 dollars. Like general financial markets, cryptocurrencies are also susceptible.

Bitcoin in the face of the crisis

The biggest shock of the week so far did not come Monday morning with the news that oil prices had collapsed. Brent Crude fell more than 31 percent shortly after the opening Monday morning, while West Texas Intermediate fell 34 percent, the biggest crash seen since January 17, 1991, the start of the first Gulf War. The collapse was sparked by conflict in the OPEC alliance plus Russia’s refusal to cut production as a result of the coronavirus.

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