As cryptocurrencies managed to recover in 2019, the list of critics continued to grow. Important figures like Donald Trump, Warren Buffett, or Nouriel Roubini expressed their skepticism when it comes to the idea of digital money independent from any central bank. Even though some of these people are experts in their fields, how come cryptocurrencies continue to exist?
The reality is somewhere in the middle and aside from crypto trading with sites like easyMarkets, there are some other uses of cryptocurrencies, which we’ll talk today.
Low-cost money transfers
With the latest technological developments in the aerospace industry and technology, you could travel physically around the world in about 24 hours. However, when we talk about money transfers, it could take up to a few days for a transaction between two neighboring countries to be settled. Companies like SWIFT are doomed to lose credibility in the face of rising blockchain technology usage. XRP is one cryptocurrency designed for cross-border payments and unlike most of the other digital tokens, it is centralized. Of course, we have cryptos like Litecoin or Stellar that could facilitate international money transfers, even though they are decentralized.
Getting involved in innovative blockchain startups
Along with cryptocurrency new methods of raising money for companies had emerged. We are talking about Initial Coin Offerings (ICO) and Initial Exchange Offerings (IEO), the lather being the most popular in 2019. Using them, companies based on the blockchain technology are able to distribute a part of their token issuance to institutional or retail investors against payment, allowing them to raise enough capital to conduct their activity. Ethereum the first ICO on the planet, while EOS and Telegram are currently the biggest ICOs on record, after managing to raise several billions of dollars.
Keeping financial activity private
Although this had been a big concern among public regulators in the past few months, cryptocurrencies are able to keep financial activity private. This could be a great advance once regulation for digital tokens will be put into place, given that it will reduce the likelihood of transaction delays and other unnecessary bureaucratic processes. However, as we have seen lately, the Facebook announcement of a cryptocurrency called Libra reignited regulatory concerns surrounding cryptos, meaning public entities are skeptical when it comes to keeping financial activities private. This could mean money laundering and terrorist financing could go under the radar of regulators, further enforcing the need for regulation and not banning them.