The global market for cryptocurrencies is projected to grow at a more than 55% CAGR through 2022. The main factors driving the growth of this market include the increasing acceptance of crypto vs. national currencies as a payment and transaction method coupled with the growing venture capital funding in blockchain technology applications.
However, volatility associated with cryptocurrency restricts its acceptability by the public. The growing concern of governments and regulatory authorities on cryptocurrency and blockchain technology, together with the high cost of cryptocurrencies, is expected to hamper this market’s growth. Continue reading to learn more about crypto and national currency.
What is National Currency?
The national currency is the most common type of currency, such as the US dollar (USD), British Pound (GBP), Euro (EUR), Indian Rupee (INR), etc. Each country has control over the printing and regulation of its national currencies.
What is Cryptocurrency?
Cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure transactions and control additional units. Cryptocurrency is categorized according to its application, i.e., global, local, and universal.
Advantages of Cryptocurrency over National Currencies
Transactions in cryptocurrency on voytegon are faster than traditional transactions. Instead of waiting for days to settle a transaction, it takes minutes or even seconds with cryptocurrencies like Bitcoin (BTC), Ripple (XRP), Dash (DASH), etc. The transaction cost in terms of cryptocurrency is much lower when compared to national currencies. Cryptocurrency wallets are encrypted and secure, making them a safe way to save money.
The number of cryptocurrencies available for buying/selling/investing is increasing day by day. This has helped the cryptocurrency market grow considerably, where investors can choose from a wide variety of options to make their investment decisions. The market valuation of cryptocurrencies may witness a phenomenal increase in the coming years.
The global cryptocurrency market is likely to grow significantly during the forecast period owing to various factors such as the growth of blockchain technology applications and increasing venture capital funding. Blockchain technology applications such as smart contracts, digital identities, etc., continue to grow, driving the adoption of cryptocurrencies. Cryptocurrencies are compatible with varied applications, including cross-border remittances, microfinance, bill payments, etc., which will fuel the growth of this market.
Advantages of National Currency over cryptocurrencies
The national currency price is not volatile, as compared to cryptocurrencies, whose prices can fluctuate depending on factors like demand and supply. Volatility in cryptocurrency prices may adversely affect many people’s acceptability of digital currencies for transactions, leading to a loss of confidence in it as a mode of payment.
National currency can be monitored and controlled by the country’s government or central bank as they issue it. However, cryptocurrencies are decentralized in nature, which means that no authority has control over cryptocurrency transactions.
In the case of the national currency, the payment system allows people to resolve disputes by legal means. However, no such framework is available for dispute resolution in the case of cryptocurrencies.
The national currency is easily accessible through ATMs and other payment platforms. However, in the case of cryptocurrencies, it’s challenging to find the correct exchange where people can buy or sell them whenever they require due to a lack of awareness.
Though the demand for cryptocurrencies is increasing, it will not replace national currencies, as most people prefer national currency transactions due to security and stability. The volatility in cryptocurrency prices has emerged as a significant hindrance to its wider acceptance by people across the globe. However, this may change with time as more and more institutional investors are expected to invest in cryptocurrencies, paving the way for a wider acceptance of this payment method.