It might seem crazy to trust and risk money with a technology that’s unregulated, but that’s exactly what users of virtual cryptocurrencies are doing. Many people have great trust in cryptocurrencies because of the blockchain technology. Blockchain technology is a combination of advanced cryptography and mathematics as well as some coding.
A trusted currency is one that fluctuates relatively little in value over time, is backed by tangible assets, and has a guarantee of value that can be fully repaid immediately when needed during catastrophic events or when everything is functioning normally. These are the main elements necessary for trust or faith in a currency; next the assurance that it won’t be counterfeited or inflated by those in charge of the money supply.
Why people trust Crypto
An electronic currency like Bitcoin or any electronic currency with a fixed value is a virtual asset with no tangible assets other than the algorithm it uses, the hardware associated with it, the data stored, and the trusting customers that use the service. Despite bitcoin’s impressive concept and popularity, it is still inadequately accepted. The popularity it has attained is purely due to its price appreciation since its inception. It is undeniable that investors and criminals alike are interested in cryptocurrency.
The so-called fake money, as bitcoin is commonly referred to, might challenge remittance players such as Western Union, Moneygram, and even traditional banks for market share. At least something we would have assumed during the original publish date of this article. However, one year later, the time it is being edited, Bitcoin has lost over 300% value.
Trustless, hence trustworthy
With traditional investments, you have to trust that the person or institution you’re giving your money to will use it in a way that benefits you. With cryptocurrencies, you don’t have to trust anyone – the code is open source, and the rules of the network are enforced by math, rather than by people. What’s more, the decentralized nature of cryptocurrencies means that they’re not subject to the whims of governments or financial institutions. So, even if traditional investments are struggling, your cryptocurrency investments could still be doing well.
Volatility is often seen as a neutral thing by investors, but in the case of cryptocurrencies, it is a good thing. Cryptocurrencies are seen as trustless and secure, despite being unregulated, because of the decentralized nature of the technology. This means that there is no single point of failure and no central authority that can control or manipulate cryptocurrencies. There are also a limited number of coins in circulation, which helps to control inflation. And because transactions are irreversible, there is very little risk of fraud.
True Financial Freedom
Those who are dissatisfied with the current financial system of governments; and banks will find bitcoin to be worth the effort and time. There is no recommendation that bitcoin should replace their local currency. The two can coexist peacefully.
As soon as you begin to see the benefits and potential of bitcoin for purchases of various types, you will feel an excited rush and gain a sense of financial freedom. You will no longer be wondering why people trust and love crypto.