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When it first launched over a decade ago, Bitcoin was a niche commodity handled by few and viewed with suspicion by many. However, the intervening period has not only seen Bitcoin’s value skyrocket through the roof – making millionaires of its early adopters – but also witnessed a plethora of copycat cryptocurrencies jump on the bandwagon.
Indeed, the fact that the entire cryptocurrency market is projected to increase from some $900 million in 2021 to almost $2 billion next year – enjoying a compound annual growth rate (CAGR) of 11.1% across the next seven years – indicates just how mainstream it is becoming. But what are the secrets to its astronomic rise in popularity? Here’s a quick rundown of some of the most significant.
Security
Perhaps the biggest barrier to widespread uptake of cryptocurrencies was the (mistaken) impression that they were somehow unsafe. Of course, it’s right to exercise judicious caution when dealing with any new type of financial asset, but the blockchain technology underpinning crypto and the rigorous cybersecurity protocols put in place to defend it – such as crypto address verification, for example – are testament to its strong security credentials.
Transparency
Indeed, the immutable nature of blockchain technology not only makes it excellent at bolstering the security surrounding crypto, but also at enhancing transparency. That’s because while no one is capable of amending a financial transaction record once it has been uploaded to the blockchain ledger, everyone can see it. This makes crypto ideal for all sorts of purposes, from crowdfunding donations to company payrolls.
Legitimacy
As the advantages of crypto become more apparent, the payment method is becoming accepted by more and more businesses and authorities. For example, PayPal has long accepted crypto payments on its platform, while both Visa and Mastercard are currently in the process of incorporating crypto into their infrastructure. Meanwhile, the government of El Salvador made world history last year when they became the first country to adopt Bitcoin as legal tender. The legitimacy which such actions lend to crypto cannot be underestimated.
Convenience
As well as being very safe and transparent to use, cryptocurrencies are also extremely convenient. Because the infrastructure surrounding them is decentralized, there are no middlemen (such as banks, credit providers or other financial institutions) to go through when making or receiving a payment. This not only reduces overheads, but also increases speed and efficiency, explaining why more and more people are favoring them.
Disillusionment with status quo
Last but certainly not least, more people are turning to crypto because of a growing dissatisfaction with the world of finance. With the system seemingly rigged to allow the rich to become richer at the expense of the world’s poorest populations, people are looking for alternative ways to organize their finances. Due to its aforementioned decentralized nature, crypto affords this possibility and has the potential to majorly disrupt existing markets.
Have you dabbled in the world of crypto investment yet? Or have you used the currency to pay for goods and services? There are an increasing number of reasons to give it a try if you haven’t already.
