How digital cash can help individuals build purchasing power and savings?

Added in: Cashonomics
By Pratham | 23rd May 2018
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Digital Cash

Any investment in currency is not without risks but if you make informed choices for investments, expenditure and savings your financial position can be elevated substantially.

Similarly with digital cash. Today regulators all over the world are taking steps to curb the exchange of digital currency and block its entry into the financial ecosystem. The advantages of digital currency is not lost on Governments of the world as they are working hard to regularise their exchange as well as researching the applications of the back-end softwares for their successful integration into the financial ecosystem.

So why is the traditional finance skeptical about the digital cash and how will it really help your finances as an individual?

Disruption of the financial system as we know

Cryptocurrencies are build on a global network of computers that become a decentralised platform for data storage and processing. A sort of a gigantic hive of data with no centralised authority. This data stores information about ‘who holds and how much’. Unlike a traditional banking system this data cannot be altered unilaterally.

Trading in cryptocurrencies allows you to minimise transaction costs as there are no taxes, interest, charges or transaction costs involved. It provides an absolute peer to peer digital transaction platform bound only by the basic rules of the network.

The network and software that cryptocurrencies are created on; have countless applications and are not just restricted to currencies. The system has the capacity to change how we look at trade and commerce and much more.

Easy access and much safer

Digital cash can be accessed anywhere anytime no matter how remoter your location is.

As it operates in the cyberspace; storage of digital cash is not an issue and you will have access to your entire bounty without the need to look for ATMs.

This ease of storage and access, makes digital currencies a necessity in those areas that are not part of the traditional financial system; as brick and mortar banks and financial institutions are unable to reach such areas.

Elimination of fraud and merchant faith

Digital currencies eliminates any possibility of transactional fraud between parties which is a common issue for merchants who are are accepting payment through credit cards online. Global merchants have mostly stopped accepting international payments through credit cards due to the widespread scare of credit card frauds.

Digital currencies are as good as hard cash. These currencies are encrypted in the name of the holder and only he has access to the money. At the time of an exchange when monies are transferred in the name of another party the currency is encrypted in the name of of the transferee thus eliminating any room for fraud.

This has allowed small traders from developing countries to sell their product and services globally. Payment through digital currencies is as easy as emailing and this is another USP for these small traders who are more concerned about reaching out to a bigger consumer base rather than being consumed in the tedious spiral of money transfer compliances that are the main characteristic of a traditional financial system.

Programmable money and smart contracts

Digital cash is nothing but a software which means there a lot of room for it to be automated. The programmable nature of money can help build smarter contracts, especially when multiple legs of performances are involved between multiple parties.

Thus securing the rights of parties across borders while keeping the money safe.

After the Bitcoin boom many are using the blockchain technology to create different currencies not all of them are safe and it is easy to be swayed by the overnight fortune building prospects of these currencies. It is always better to do your own research and better to lean from the experiences of other before you invest your hard earned money.