The Federal Reserve of Saint Louis earlier this year published a study that explores the advantages of cryptocurrencies for privacy protection.
This only goes to show that despite the decline of cryptocurrencies’ value – Bitcoin, Ethereum, Litecoin, and other cryptocurrencies - the cryptocurrencies still offer a significant advantage simply due to the way they function.
That said, while antitrust agencies, mostly coming from central banks, may be sceptical about cryptocurrencies and Bitcoin as a whole, its high time the tables are turned. And, whether anti-trust agencies like it or not, cryptocurrencies are likely here to stay.
Now, let’s take a look at some of the key advantages of the cryptocurrencies platform. And, we’ll also tackle a few of the consequences of adopting them in the modern marketplace.
Advantages of Cryptocurrencies
1.Leverage Privacy Protection where Central Banks May Fail
Decentralized cryptocurrencies have a serious advantage over the central banks, primarily because of the privacy protection they can provide to their users. With cryptocurrencies, you can make transactions without the need to verify or reveal your identity. As privacy needs vary in type and degree, cryptocurrencies offer an alternative solution that the current system is not yet able to provide.
Digital money offers a practical advantage when it comes to security. Bitcoins have the ability to operate and function without a single point of failure which means they’re not as vulnerable to hackers.
3. More Power in the Hands of the Consumers
Let’s take, for example, the holidays. Local banks are often closed during holidays, so if users will have an emergency need for financial services to make payments, they will not be able to get the service they need. Meanwhile, with cryptocurrencies, users will have full control of their funds. Independent from central bank’s regulations, crypto platforms will allow users to freely make transactions anytime and virtually anywhere.
The Consequences of Cryptocurrencies
1.Heightened Competition between Traditional and Start-up providers
Once the potential of cryptocurrencies is realized, we can expect an upswing of different platforms for specific purposes. This translates into a tighter competition between traditional and start-up providers in various fields.
2.The Risk of Illegal Transactions
The exemplary privacy protection, cryptocurrencies offer can also have a negative effect as they can become a convenient tool for some entities to perform illegal transactions.
3.Introduce Change in the Role of the Fed
As cryptocurrencies will address privacy concerns to cater to varying privacy needs, the central banks and financial institutions authorities will have to redefine their roles. There function is no longer merely on privacy protection, but rather in regulating privacy. The key is implementing regulation to prevent misuse of cryptocurrencies application.
Overall, cryptocurrencies have a significant advantage over central banks in a number of areas including seamless privacy protection, security, and more financial freedom. Given these benefits, perhaps it is time for antitrust agencies to re-examine their opinions about crypto. And, instead of rallying for the government’s ban on the use of cryptocurrencies, these anti-trust agencies should start recognizing the benefits of cryptocurrencies.Published: Jan 6,2019 06:08:24 AM IST, Updated: Jan 6,2019 06:14:31 AM IST