Technology has completely altered and revolutionized the world makes payments. Every transaction and payment method has been influenced in some way, changing the way we think about finance.
The vast majority of the world will use contactless methods to pay for goods or services. We can use our smartphones, tap our cards on terminals with NFC spots, or even use the internet to store our details and immediately fill them in before confirming with a single click. However, one method that is still emerging as a mainstream option despite being around for over a decade is cryptocurrency.
Digital assets have been a valuable commodity that many have viewed in several ways. Most will view them as a potentially investable asset. They’ll use the best Bitcoin exchanges to buy and trade the virtual currency, with an aim of obtaining a return over a period of time. Indeed, they’ve shown how this is possible through the volatility that is attached to them. In a moment’s notice, they can see their price be influenced by market confidence, with positive movement able to skyrocket their value. Conversely, negative reactions can send their value plummeting.
Still, crypto assets and the exchanges that exist have altered the way we think about finance, just as much as any other form of fintech development that has been experienced.
Decentralization has given people power
Arguably, one of the biggest ways in which cryptocurrency and the exchanges used have changed the way everyone thinks about finance is through its decentralized nature.
Currently, all fiat currencies are governed by centralized authorities. Banks and governments can have a say on how well currencies are doing, while they can also control what it can be used for. Crypto has disrupted the norm, allowing people to engage in activities that they may not have been able to participate in previously, such as gambling.
Blockchain technology is used to provide power to holders, as it uses peer-to-peer protocols that allow transactions to be made without the need for intermediaries. As a result, they have more control over the entire transaction process. Some exchanges will allow users to trade directly with each other, eliminating the need for a third party, which can come at a cost. With costs being saved, transparency is also obtained as users know exactly where their money is going.
Accessibility and redefining wealth
Financial participation with fiat currency has been a limited practice. Much of the world remains unbanked, particularly in regions where poverty is widespread. The World Bank has found that approximately 1.4 billion people remain unbanked, lacking access to basic financial services. The availability of crypto exchanges helps provide individuals with access to these, enabling users to store, send, and invest money using nothing more than a smartphone.
Cryptocurrency has proven to be popular with poverty-stricken nations where corruption and inflation can also be experienced. For example, there are many countries across Africa where crypto has become the main method due to its decentralized nature. Holders can increase and protect their wealth with these commodities, as they aren’t tied to fiat currency. When inflation happens, they’ll know they’ll retain their wealth – albeit as long as volatility hasn’t impacted the tokens held. In addition, they can access their funds at any time, rather than having to wait until the opening hours of an institution or stock market.
Investing has also become accessible through the availability of crypto exchanges, allowing individuals to access a new way of generating passive income.
Creating a new way of financial thinking
Crypto exchanges have encouraged a new way of financial thinking, challenging traditional banking methods and giving individuals a new true meaning of finance, money, and financial understanding through education.
As people become more aware of the many benefits that blockchain technology offers them and how it can protect their wealth more, major banks like JPMorgan and Goldman Sachs have begun exploring blockchain technology and even offering crypto-related services to clients. Even digital options like Visa and PayPal have looked to integrate crypto transactions to ensure they remain accessible to everyone.
A cultural shift can be identified as the reason for this phenomenon. Crypto exchanges have enabled individuals to develop a mindset that values the true meaning of financial aspects. This can include financial sovereignty, transparency, and innovation. They’ve also sparked conversations regarding the nature of money and why fiat options are being controlled in the way that they are in the modern era.
Final Thoughts
While some may view crypto exchanges as a place to buy and sell virtual currency, there is no denying that they’ve been important in changing the mindset of many regarding finance and how they make payments.
By providing users with accessibility, innovative new technologies that can promote trust and protect value, as well as the decentralized nature that eliminates the need for financial institutions, many are questioning what advantages the old methods still provide.
Given that there have been instances where major banks are now taking proactive measures to implement them, it’s clear crypto exchanges are going to be a major player in their own right in the world of finance in the years to come.
