What is Cryptocurrency you may ask. To help you understand better, the definition of cryptocurrency is that it’s digital or virtual money that is in the forms of token or coins. It is used for the process of purchase or exchange. The perfect example of Cryptocurrency would be Bitcoin, most people heard of it during the rise of Cryptocurrencies. Currently, it is still a trend of investment in the world.
So the impacts of Cryptocurrency to the Growth of Economy are as below:
1. Influence of Cryptocurrency on the Economy
First of all, the majority of the Cryptocurrency systems are made based on blockchain technology, where the systems are mostly decentralized. Important to note, is that the Cryptocurrency Bitcoin is the father of the blockchain technology-based Cryptocurrency system and is a currency used in global transactions or exchange. The Bitcoin Exchange is a digital market that allows traders to buy and sell bitcoins.
2. High Demand for New Products
Logically, when there is a demand for a certain product, there will also be an increase of workforce in specific industries to be able to supply what the customer needs.
3. Impact on the US. Dollar
Not to mention, the US dollar has always been an internationally accepted currency in the global economy. In addition, this allows the United States to maintain its dominant stand on the global economy. Whenever new types of currencies exist in market, this will greatly impacts the process of International activities as they are it runs with US dollar.
4. No Intermediary Activities
In normal cases for global transactions, SWIFT(Society for Worldwide Interbank Financial Telecommunication) or central bank will act as an intermediary in the process. After the presence of the Cryptocurrency Exchange Platform, the use of cryptographic rules eliminates the usual transaction costs for a global transaction.
5. Inflation of Prices
As a country’s economy grows, it should correspond with the acceptance of the Cryptocurrencies in a country. Furthermore, the criteria will be the amount supply and a fluctuating number of coin supply. If not, inflation could occur in the economy.
6. Increase of Transactional Costs
During the implementation of Cryptocurrency, this would result in higher costs during the transactional process. But soon after a complete implementation, the transaction costs will be lower and would help an economy grow by gaining more profit and benefits.
7. De-monopolization
Moreover, de-monopolization occurs when there are increase in transactional costs which gives great benefits towards the economy. Most probably it would also raise the enterprise growth costs and the involvement of intermediaries. Most importantly, this opens up more opportunities for small or medium enterprises to grow better.
8. Employment Opportunities
Last but not least, Cryptocurrency strikes the economy. Making intermediary jobs including bankers, lawyers, suppliers, and more to lose their job because they are no longer in need for this sector. But on the other side, it also opens up new jobs to the industry, such as Data Scientists, Financial analysts, Journalists, Machine learning engineers.
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