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Who Uses Cryptocurrencies and Why?

who uses cryptos

June 3, 2021 | 

1661 Views | 

JOHN K MWANIKI | 

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Cryptocurrencies aren’t the mainstream currency yet. Yet, several financial institutions and organizations continue to buy into it at an increasing rate. Their appreciation for the influence of digital currency is also growing. Cryptos are the future of money. While some people are skeptical about it, many see its potential and unlimited uses. You can use cryptocurrency like how you use other currencies to trade, buy goods and services. 

One way that digital and paper currency differ is that the money is virtual. Another significant difference is you can use your crypto to store or make your payments anonymously. You can buy crypto units from different brokers. Another way is to generate them through mining. Currently, there are thousands of cryptocurrencies in circulation. A report by Investopedia put this figure at more than 4000 in 2021. Companies are still continuously launching cryptos. From the article, you will learn more about the people who use cryptos and their reasons. 

Who uses cryptos? 

The original crypto to be launched was Bitcoin. To date, it is still the most famous crypto. If you ask anyone what digital currency they know, the answer will be Bitcoin. Many trials are still being undertaken, and the main goal is to encourage crypto adoption in different sectors of the economy. Providing attractive incentives has also boosted the adoption of cryptos among industry players. 

1.E-commerce stores 

Cryptocurrency is used in e-commerce. Here, it is beneficial both to the merchants as well as consumers. When merchants accept crypto payments, it significantly reduces chargebacks and transactional fees, which can sometimes be outrageous. Chargebacks are among the leading causes of fraud that online vendors have to deal with. Also, many times credit card companies set fees that are too high. That affects the vendors’ ROI, and sometimes merchants have to issue their own credit cards to beat this. 

When a vendor incorporates crypto payments into their credit cards, they can provide clients with several incentives such as cashback. That will encourage them to use those cards instead of the other ones attracting high fees. In the future, more merchants will likely offer virtual currency cashback to their clients. 

2.Financial Platforms 

In developing countries, cryptocurrencies can provide a haven for financial platforms and decentralized finance services unavailable in these areas. Interestingly, the adoption of cryptos in developing countries might somehow be higher than in developed countries. Additionally, the demographic of crypto users is quite different there. In financial services, cryptocurrencies provide an excellent alternative to physical currency. The latter is constantly undergoing hyperinflation. 

Cryptos are used as a store for value instead of the banking system or gold. It is also a fast and convenient payment avenue to send money to international locations. Therefore, they act as a safety net against economic and political instability in these areas. As the DeFi sector continues to grow, the use of crypto in developing countries will keep growing. That’s especially seeing that these platforms are continuously pursuing the need for finance to become as open and transparent as the internet is. 

Whether you come from a developing or developed nation, you should have access to the same financial product as another person in different places. Regardless of how much you have, you should rightfully access the financial solutions, same as someone with a lot more money. 

3.Digital assets trading 

The trading of digital assets is the most prominent area in which cryptocurrency is adopted. The crypto market has been exiting the long-term downtrend slowly but surely; hence, the volume keeps rebounding. Newer exchanges are making their mark, and more innovations continue to come into the market. These developments are bound to keep attracting more and new traders from the traditional sectors. 

There has been a substantial influx of traditional marker traders into the cryptocurrency market in recent years. It is very impactful and essential for the health and prosperity of the crypto market in the short term. Much capital has also been invested in crypto businesses. For the industry to survive in the long term, the predicted advancements ought to be implemented. 

Why is cryptocurrency popular among people? 

There are several reasons why institutions and people continue to appreciate the relevance of cryptos, and here are some of them. 

1.Lower fees 

One primary reason for the popularity of cryptocurrencies is it attracts very minimal fees. If you are using other types of online payment options, you will typically attract very high fees. That is not ideal for anyone. By choosing to use virtual currency, you’ll attract lower fees, which is much better. It will also be more sensible to use this method when making online purchases because it also provides safety. 

2.Potential profits 

Investors are using cryptocurrencies because of the potentiality of making profits. If you buy them at lower prices, you will potentially benefit once the price does rise. Many people who invested in cryptocurrencies when they were initially launched have made huge profits. That is because they cost very little before they became highly sought-after. Investors continue to profit from cryptos since the market continues to prosper. It doesn’t seem like that will change soon. 

3.Not tied to world government 

People have a lot of faith in cryptos because they have no ties to world governments. It means that they are likely to remain stable even in turmoil or political unrest in certain countries. Many investors see this type of currency as an excellent way to protect their assets and wealth. Security and safety are major contributing factors to why the value of virtual currency keeps growing to date. The fact that cryptos are comparably safer to official government currencies is enough reason for anyone to opt-in. 

Conclusion 

Cryptocurrency is the present and future of currency. It provides different industries and sectors with opportunities to grow and use innovative financial solutions to solve various issues. Nowadays, cryptos are taking up innovations like blockchain to keep their financial edge and make sense to new investors.

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