When they first came into existence, a lot of the major analysts paid little to no attention to the notion of digital currencies. Still, not only did they persist year after year, but their influence grew so much that they are currently dangerously close to becoming a mainstream method of payment.
In fact, Japan already regulated Bitcoin and it is estimated that Australia is about to follow suit. Not only is this formal recognition by two economic superpowers, but it is also a clear indicator of the way in which digital currencies are reshaping our world. With this in mind, here are five major ways in which the future of business may be affected by the ever-growing popularity of digital currencies.
Lower Transaction Fees
Even though credit and debit cards are still more popular than digital currencies, every payment made through them comes with a small transaction fee. Now, when you try to multiply the average fee with the number of people using this method of payment, you get to see the full extent of the inefficiency of this system. On the other hand, digital currencies are not only capable of further lowering the fee, but perhaps of eliminating it entirely.
Another major benefit of digital currencies may not affect the business world as much as it does our planet as a whole. You see, even though only 3 percent of all money exists in physical form, the massive number of bills printed makes the issue of deforestation even worse. On top of this, smartphone applications could soon make the concept of change completely obsolete and, with it, the need for coin smelting (which is, yet again, resource intensive).
Due to the fact that most digital currencies have a cap, they are deflationary. When you take a look at the traditional currencies, you will realize just how rapidly inflation makes the value of money drop. For instance, $10 two decades ago is worth the same as $15.22 today. In other words, we are seeing more than a 50 percent drop in as little as 20 years. With their brand of deflationary properties, digital currencies might just be able to avoid the same fate.
One of the greatest advantages of trading in digital currencies is that it allows an unprecedented level of anonymity, as far as digital transactions are allowed. Seeing as how they are nearly impossible to trace, a lot of people are comparing digital currencies, and especially cryptocurrencies, to cash. Whether or not they will substitute cash in the following decades or not, remains to be seen.
Finally, when speaking about digital currencies it is important to mention just how different they are from each other. For instance, the difference between the dollar and the euro is mostly in value while Bitcoin, Zcash, Ripple and Dash differ in other properties as well. As a result, this means that those who decide to sell digital currency in order to make a fortune first must do extensive research on the topic. The knowledge gained from trading in one digital currency helps, but not to the extent you would expect it to.
In the brief time they have been around, digital currencies have made some incredible changes to the business world and every serious analysis of the topic predicts that they will keep doing so in the future. Apart from changing the way in which the world of business functions, they might also alter the way in which business is perceived by corporations and consumers alike. Nonetheless, we will have to wait and see the full extent of this influence.