The crypto currencies are often viewed as a secret financial invention but this innovative medium of exchange definitely has the potential to change the current banking and economic structure. The functioning of this system of exchange happens without the interference of a third party or intermediary, thus it reduces the transaction costs by a great deal. It is important to also understand that the lack of a regulatory body is a reason this new found currency is not finding acceptance among the common people. Everything that happens here is anonymous, the sender, receiver, the transactions and all of it. It is definitely secure but people wonder why there is so much secrecy involved.
The after-effect of Bitcoins’ Success
Bitcoins the first crypto currency launched in 2009 continues to show an upward trend in the prices. The prices rise of bitcoins has been the most talked about topic in the crypto market. It has made a lot of the leading financial and banking firms to invest in the research of the instant success of this mode of exchange. These stories have sure affected the economic and banking prospects as a whole. Like any other innovation, this also has a positive and negative side to it.
- The Success Misused – The invention has been in a lot of controversies due to the secret nature of the transactions. It has been allegedly used for many illegal transactions. The identity of both the sender and receiver is anonymous hence anybody can purchase or sell banned products or services over the internet. This has been one of the main drawbacks of this platform. Experts believe that this might increase the incidents of cybercrime.
- Mining on Price fluctuations – The soaring prices of bitcoins have prompted many to join this platform to benefit from the price rise of these currencies. The fluctuations have been massive and this has presented the traders with more opportunities to earn profits from the speculation. Thus Bitcoin mining has become the new trend in the investment market.
- Low Costs – Investment in bitcoins is more of cost-effective when compared to shares or any other mode of investment. Thus anybody can take part in the trading and gain from the speculation.
- The emergence of a new system and trading platform – The zero transaction costs make this form of money superior to the traditional currencies. This can be used as a gateway to change some of the mundane financial and banking practices.
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