Since its inception in 2009, Bitcoin has gradually grown in popularity and with it, thousands of other cryptocurrencies have appeared. Operating on a decentralised network, these forms of currency are not controlled or regulated by any central bank, government or other third party, putting control back in the hands of those who use them.
One of the chief criticisms levelled against cryptocurrencies is a perceived unsafety in their use. However, the very nature of crypto, alongside the technology which underpins it, means that in many senses, the new form of currency is actually more secure than the fiat currencies it is succeeding. Keen to learn more? We’ll investigate the different aspects of crypto which make it such a safe method of conducting online transactions below.
The defining feature of cryptocurrencies is their decentralised nature. Whereas fiat currencies are backed by state entities, cryptocurrencies are governed by the rules of the blockchain technology which handles transactions. As a result, governments, police authorities and financial institutions can intervene in fiat bank accounts to freeze assets or overturn transactions. No one can prevent you from completing a crypto transaction online.
As the name itself suggests, every transaction conducted using cryptocurrency is encrypted online. This means that it’s extremely difficult for a hacker, cybercriminal or other malicious actor to gain access to the sensitive info contained within the data or otherwise hijack the transaction. The blockchain ledger upon which all cryptocurrency transactions are stored is immutable, so it cannot be altered after the fact, contributing to impenetrable security.
Although all blockchain transactions are encrypted and immutable, they are completely transparent. For example, anyone with a basic grasp of data science can use a Bitcoin transaction tracker to explore and observe individual transactions, and tools abound for those completely new to the technology. On the other hand, the gatekeepers of fiat currency (credit and debit card providers, banks or online payment platforms) only display the information they wish you to see.
At the same time as transactions are transparent, the parties behind them can remain completely anonymous if they wish to do so. This is because the decentralised nature of crypto demands the input of far less personal information when setting up an online wallet and sending or receiving assets. By contrast, fiat currency transactions involve a much greater intrusion on your privacy.
24/7 global remittance
Another strong selling point of cryptocurrency is the fact that blockchain never sleeps. Sending money from one bank account to another (especially across borders) can take days or even weeks to process, with third parties helping themselves to a cut of the capital each time a conversion from one fiat currency to another is made (and oftentimes even within the same fiat currency). Crypto, on the other hand, can be processed within seconds or minutes, fees are drastically lower and the unit in question is worth the same amount all over the globe.
From the encryption protocols and anonymity that crypto offers to the decentralisation, transparency and consistently affordable global remittance of the technology, there are myriad factors which make it safer for online transactions than its fiat counterparts.
*This article was paid for. Cryptonomist did not write the article or test the platform.