Cryptocurrency continues to change the global economy

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The influence of cryptocurrency continues to grow as rates of various currencies keep rising. Over the years, cryptocurrencies have been the subject of debate among experts, many of whom believed that they would soon die. However, with the sharp rise in the value of bitcoin and the emergence of the first crypto-billionaires, it became clear that the spread of e-gold would continue, and with it the world economy would continue to change, and talk about banning or limiting the use of the new resource in entire countries ceased to arise.

The number of users of the currency will soon reach 10 million people, and the aggregate value exceeds $60 billion. With such a market value, the impact on the global economy of cryptocurrencies is growing due to growing electronic assets around the world. The main cryptocurrency producing countries are the powerful economic powers of the U.S. and China. At the same time, most countries, where cryptocurrencies have only recently begun to be used, are now very positive about the regulation of the use of currencies and related transactions. Moreover, banks of different countries are exploring the possibility of creating national cryptocurrencies or a single international cryptocurrency, which would be a great help in the development of the global economy and trade relations.

The cryptocurrency market in the past few continues to grow rapidly. The most famous and expensive unit of currency remains bitcoin, which has the laurels of a pioneer and revolutionary in world markets. The maximum number of bitcoins counts 21 million pieces, and much of the currency has not yet been distributed or “mined,” which means that bitcoin will not exhaust its potential for a long time. However, there are plenty of currencies now, and their number and value will grow.

One of the new currencies with a strong position in the world markets is Ethereum, a blockchain-based currency that creates servers without a center and works in the form of smart contracts. This currency appeared quite recently, but it is already getting an informal status of e-currency. Many experts believe that this currency will become more expensive than bitcoin in the coming years. The cryptocurrency IOTA has shown impressive growth in recent months. It is unique in that it is designed as a lever for the Internet of things exchange network project. It is interesting to note that IOTA eliminates commissions charged on any transactions. A promising currency has become Ripple, which has reached the leading positions in terms of capitalization and is used in real-time gross settlement procedures, as well as serving as a universal service of funds transfer and currency exchange.

Ripple has been supported by major financial market players such as Unicredit, BBVA, Mizuho, and UBS. Some types of new currencies are created specifically for specific segments and niches on the Internet – for example, for online tournaments, as was done with the currency CHP.

CoinPoker, which introduced the currency, gave poker players not only the opportunity to win at tournaments, but also to invest in cryptocurrency, which they can win, buy and sell. Now many countries are trying to regulate cryptocurrency somehow. You can read about Cryptocurrency Regulations Around the World on the website.

Blockchain technology, combined with the development of cryptocurrencies based on it, has enormous potential for development and impact on the global economy. The creation of a new national cryptocurrency within a single country, according to calculations by the Bank of England, will give the state an additional 3% of GDP growth. This figure is achieved through new transactions with lower interest rates. For the countries of the Eurasian Union and Russia the figure may exceed 3%, because transaction costs and interest rates are higher here than in North America or the European Union. It is also worth noting that cryptocurrency transaction and distribution technology has enormous features and capabilities. Acquiring currencies involves almost cryptographic registration of ownership. The subject who owns the currency becomes the automatic owner of the property. The subject’s ownership will be helped by the same blockchain. Thus, this algorithm can also be applied to attribute the value of ordinary money in the market to cryptocurrency. This makes cryptocurrency an electronic analogue of conventional money, while keeping cryptocurrency universal, transparent and convenient, that is, preserving all the pros of cryptocurrency. In this regard, the option that cryptocurrency will displace conventional currency seems quite possible.

However, it is necessary to take into account all the new risks associated with the development of electronic currency, which have not yet been fully investigated. Risks can stem from the deflationary nature of the economy, which is based on a finite currency asset. When there is a product, which is a measure of value and, due to its exhaustibility, growing in value, spending it for economic agents seems pointless: they begin to switch to saving in consumption, and economic development ceases. Under such conditions, the state loses the ability to control the mechanisms of transactions and money flows.

It is also important to note that the lack of demand for decentralized issued means of payment associated with the spread of cryptocurrencies at the state level can theoretically discredit conventional money as a customary means of accumulation. Cryptocurrency carries almost no arbitrage costs. Electronic money can always be transferred anywhere on the planet at virtually no cost, which is different from, for example, national assets. Thus, for cryptocurrencies, the state is unable to conduct an independent interest rate policy, which is a risk.

The creation of state-owned cryptocurrencies is not far off, as is the further development of cryptocurrencies around the world. Because of this, the global economy will change, as transactions will increasingly go online, and currencies will move to electronic savings. This is why the number of investors in cryptocurrency continues to grow – in the world of the new economy, electronic assets will be valued much higher than they are now.

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