Cryptocurrencies have impacted our world in a distinct way just as the Internet did in the 1990s. In a very fundamental assertion, cryptocurrencies cannot be separated from the Blockchain.
There is a consensus among several tech experts and analysts about unfolding Blockchain developments. Leading experts readily surmise that “Blockchain technology is the most significant Invention since the Internet and Electricity.” How have cryptocurrencies altered the way we live, think, and go about economic activities?
Cryptocurrencies have recorded a price swing as seen in the Ripple price surge along with other altcoins so far, this year. Beyond the price wave of cryptocurrencies, other tangible effects are worthy of mention. Now, let us look at the unavoidable economic and financial aspects of cryptocurrencies on the following standpoints:
Value Creation
Anything that does not add value has no tangible underlying economic impact. It is this recognition that has jolted Wall Street and Mainstreet to accept cryptocurrencies. Cryptocurrencies come in all shades and descriptions, but, there is a tangible effect attached to them.
Several cryptocurrencies beginning with Bitcoin has a recognizable value. And this is the reason while after a year of whirlwind swings; many people have begun to pay attention to them.
Bitcoin peaked at an all-time high of $18,727 in about a week to Christmas of 2017. Many people who bought the coin at less than $1,000 a few months prior recorded a surge in the value of more than 18,000 percent. In clear terms, these early investors experienced value creation like they have never seen in a lifetime.
A Surge in Economic Activities
Many times, people say that man is a political animal. Beyond this, man is also fundamentally an economic being. People seek ways to earn a living, grow their wealth, or provide value for personal gain.
Cryptocurrencies created a boon that led to the springing up of wholly new sectors and businesses that were hitherto unknown to humanity. Crypto exchanges were established across the globe along with crypto blogs, brokers, and tech startups.
The entire worth of the crypto market according to the respected coinmarketcap portal was $437 billion as at May 10, 2018.
A Boost in Individual Wealth
The rise of cryptocurrencies has led to the minting of brand new millionaires in the past 12 months. From the surge in value in Ethereum price quotes to the climb of EOS market value, wealthy examples abound.
Any economic activity that does not lead to a boost in individual wealth is seen as a fluke. However, cryptocurrencies passed the vital test of financial advantage in many countries.
Just like the Internet scenario in the 1990s that birthed dotcom millionaires, the likes of Binance CEO, Changpeng Zhao has become noteworthy. Coinbase gave rise to GDAX, and many people saw a leap in their personal wealth across the globe from crypto trading.
Better Standard of Living
One of the remarkable financial aspects of cryptocurrencies is the improvement in the standard of living. From a $100 investment in January 2018, many people have seen their earnings rise fourfold and fivefold as EOS price surged. Bitcoin Cash has also seen a threefold surge in the quarter to May 2018.
While it might be argued that not all cryptocurrencies have been on the rise since January 2018, the Top 10 cryptos do. Although the pace of price appreciation hasn’t matched that of 2017, a rise in price has become evident in the last two months to May 2018.
As the value of cryptocurrencies goes on the upswing, investors see better returns, and by implication, more money is at their disposal. This is a clear evidence that a better standard of living is experienced by those who invest in cryptocurrencies.
Higher Taxation Receipts
Governments across the globe fell over themselves as 2017 closed to limit cryptocurrencies, and this halted the price momentum. However, like q story that refused to go away, support for cryptos has gained traction in recent months.
The mood in government circles across the globe right now is to regulate rather than hamper the trade in cryptocurrencies. In the United States, the authorities have marshaled a tax plan that targets cryptos in capital gains tax. This means a surge in tax revenues for the IRS.
Other governments have also decided to tax cryptos in the hands of the holders by recognizing gains and losses. As cryptos are embraced as legit transactions with financial and economic implications, everyone gets a cut of the price surge. Individuals will disclose their gains and losses, and tax authorities will reap the taxes.
There is also a big contrast that must we not forget when it comes to crypto trade. In a clear assertion, money invested in cryptos could be lying in the banks as savings, with no boost in wealth creation. By putting such monies to economic activities such as crypto investing, the central government profits remarkably from the taxes that arise therefrom.
The Boost in Global Wealth
Cryptocurrencies have provided a boost in global wealth that cannot be overlooked. While a global base of stats might not have been provided, the inferences cannot be downplayed.
Countries like Malta have evolved policies to position the clime as a crypto haven. Big crypto corporations like Binance have moved their operations to favorable climes like Malta. In essence, the country will profit from the investment made in facilities, employment of residents, and associated levies and taxes.
As the wealth of countries, individuals and corporations surge due to cryptocurrencies, global wealth gets a shot in the arm. There is no doubt that commerce plays a big role in wealth creation. Facets of commerce readily emerge in many ways that can be identified.
Several cryptocurrency exchanges establish nodes, servers, business offices, and translocation points around the globe. These activities mean expenditure on equipment, personnel, and territorial rates or taxes.
As economic activities witness a boom from increasing crypto trade on the vertical and horizontal sphere, global wealth increases.
Transactional Efficiency
Many businesses are witnessing increasing activities as a result of the adoption of cryptocurrencies as a medium of exchange. Payments can be made from various countries around the globe for services without foreign exchange difficulties with crypto usage in place.
As transactions become more efficient, there is no doubt that the impact on economic activities can be felt. While many people get turned off by foreign exchange difficulties, a crypto-payment merchant will easily win over such a client. It is this realization that has led to payment processors accepting crypto payments this year.
Payment gateways that are enabled for crypto payment acceptance are growing by the numbers. Bitcoin, Bitcoin Cash, Ethereum, USDT, and many of the leading cryptos are becoming widely accepted in many climes. Innovations like the lightning network have also contributed to the trend as they remarkably speed up crypto processing speed.
Enabling a Real Global Economy
The banter of a real global economy has been on for some years, and many people can allude to this fact. Facets of this allusion have become a reality over the past decade with digital payments sprouting up across the globe. Stripes, Square, and PayPal have all contributed to the global economy in many ways.
As people travel from one country to the other, payment processing imposes a challenge in many instances. Selling, buying, and trading faces limitations across borders despite digital payment options.
The rise of cryptocurrencies has eliminated some inhibitions in global trade and enabled a direct seller to buyer transaction across borders. A seller in China can transact with a buyer in South Africa using an Ethereum smart contract with no need for banks and time lag.
A traveler can embark on a business trip abroad without the limitation of cash handing as long as a crypto wallet is funded. In simple terms, cryptos are enabling a real global economy in many ways. Cryptos are making it possible for people to work, live, and earn anywhere on earth without payment constraints.
Big corporations like Microsoft, Oracle, Facebook, and others are already exploring how to optimize cryptocurrencies for our world.
More Savings and Profitability Options
Every business runs on the advantage of profitability and cost savings, otherwise, it will become a social enterprise. Ripple is one cryptocurrency that has provided the banking sector with tangible cost savings and better profitability.
RippleNet cuts money transfer processing costs and reduces the time lag in transaction completion. By expediting money transfer to a matter of seconds instead of days, a boost to banking efficiency is assured by Ripple.
A bank is enabled to save at least $3.76 on each money transfer when it uses RippleNet. Considering that millions of money transfers take place daily across the globe, it is obvious that cryptocurrencies like Ripple have an enormous financial and economic impact.
A couple of analysts have opined that the future of the world is clearly mapped to cryptocurrencies and the Blockchain. The emerging picture is one of a crypto-dominated world as innovations come to light daily around the globe. Cryptocurrencies are evolving, and they provide a pathway to an emergent one-world economy.