Today, we’ll be looking at the top 5 benefits of digital currency over traditional currency.
1. Virtual currencies are decentralized
The major problem with regular currencies is that it varies from one country to another. If a person living in the United States needs to send money to someone based in England, the currency has to be converted from US Dollars to GB Pounds, and the exchange rate of that particular day gets applied. Digital currency carries no such weakness; they are the same and carry the same exchange rate all across the world no matter the country.
2. No involvement of third parties
When money is sent digitally via traditional methods, they pass via multiple agencies and entities before reaching to the receiver. This gets much more complex in case of international transactions where they go through multiple government and private agencies to facilitate a transaction. Digital currency doesn’t involve any third party; the transfer is instant. The money is transferred from one wallet to another directly which is a lot more convenient and easier for both the sender and receiver.
3. No international transaction fees
International fees for international transactions usually cost sizeable money and can significantly devalue the actual amount sent. For example, if someone in India does a wire transfer to someone in the United States, the final amount received by the receiver can be much less than the intended amount because of various transaction fees involved. Virtual currencies have no such issues; the value of the money sent always remains the same, so the receiver receives the exact amount of money sent by the sender irrespective of the location and time zone.
4. Highly anonymous and secure
With the advent of online transactions, online privacy and security have become a major area of concern for many. With almost every website insisting on storing credit card and bank details and with more and more credit card data leaks occurring on a frequent basis, the need for a secure method of transaction is more than ever. Digital currencies avoid this issue by keeping the transaction completely anonymous. All that is required is the current address of the receiver, to which the sender will dispatch the money. The details of the party involved are not revealed to anyone, keeping the transaction anonymous. The lack of personal or bank data associated with the transaction means no private or sensitive data is ever leaked onto the internet, either accidentally or intentionally.
5. No inflation
Inflation can be a major issue, especially in some countries that have massive inflation and the national currency is highly devalued. This can cause some genuine issues with the transaction and may invite some dishonest practices from those countries which do everything in their power to keep their currency afloat with little regard for the country’s economy. With digital currencies, the problem of inflation does not exist because there is no central controlling authority that dictates what the value of the currency will be. All digital currencies are run by the people, for the people, and organizations have no say or effect on the value of the currency. This helps keep the prices in check and keeps the microeconomy between the buyer and seller safe and untouched by external conditions.