Why cryptocurrency? What is the point? What even is it?

You must have heard someone ask why cryptocurrency matters

Lots of people ask why cryptocurrency, especially if they don’t really know what it is. It is quite common for this question of why cryptocurrency to be followed with statements about how cryptocurrency is a scam, it won’t go anywhere, it’s a bubble and is going to crash. So how can you explain to someone why cryptocurrency matters?

What is cryptocurrency?

You can’t explain why cryptocurrency to someone unless you know what it is. However, it is quite difficult to boil it down into a few, simple words because of how broad cryptocurrency and blockchain is. There are lots of different projects that do completely different things.

Blockchain is the basis of cryptocurrency. Blockchain is a series of records that are stored and verified by a distributed network of computers across the globe. The technology makes it so records are immutable – meaning they cannot be changed. This is because the network is distributed, so even if someone tries to illegitimately change the records on their network, the rest of the distributed network will not align with their version so it will not be carried forward. This allows two parties to exchange without the requirement of a trusted third party.

A lot of cryptocurrencies use blockchain technology, so the explanation of blockchain is partly the answer to ‘why cryptocurrency?’ – this is because transactions cannot be falsified. This is a massive benefit of cryptocurrency. Some cryptos, such as NANO, don’t use blockchain, but use something similar.

There are also so many other reasons why cryptocurrency is so popular. Let’s have a look at a few of them.

Cryptocurrencies can help so many different industries, using their tokens and blockchain technology to offer great solutions to their problems. One of the most popular at the moment is supply chain management using cryptocurrencies. Crypto can be used as the payment method for the business, where they use blockchain to fully track the supply chain of any product. This is highly desired by many massive companies, as crypto and blockchain can be used to improve their current supply chain. Crypto can harness IoT to improve efficiency, cost and of course reliability. All of these are huge improvements and this is why a lot of companies are currently exploring supply chain coins.

A lot of people ask why cryptocurrency is good when they are talking about payments. It is often wondered why cryptocurrency is useful when current money works fine?

Firstly, with cryptocurrency you have full control over your own funds, which is a major appeal to a lot of the users. There is no need for banks or other trusted third parties.

Secondly, you have the option of either using a fully traceable transaction or a fully private transaction, depending on what is desired.

Thirdly, cryptocurrency can provide fast and low fee payments worldwide, with no exchange rate issues. Some have no fees at all! Cryptocurrencies are also being used in some places in the world to tackle their massive inflation problem.

Another reason why cryptocurrency is growing in popularity at the moment is the ability to profit. Right now, it seems as if crypto is in its infancy, and a lot of people are taking advantage of this and making a nice profit. It is like investing in start-ups to some people, as a lot of these projects aim to be fully fledged companies in the future.

The answer to the question ‘Why cryptocurrency?’ is a complicated one, as you can see. It can be boiled down to the following: because it is a new technology that is growing fast, shows lots of potential with partnerships with major companies worldwide and has lots of benefits. Additionally, early investors have the ability to make some nice profit.

Hopefully you now have some ways to explain why cryptocurrency is good to other people!

Thanks for reading this post ‘why cryptocurrency’. Check out some of our other informative blogs!

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