The growth of the cryptocurrency ecosystem can not be underestimated. Cryptocurrency’s overall market cap rises each year. Cryptocurrency has broken down the barrier between world finance and unbanked people. So far, the financial market has been dominated by large investors and banks. They have controlled the hegemony in the world economy for years. Cryptocurrency opens opportunities for new players to shift the old actors in new economic ecosystem under the decentralized philosophy. The rise of cryptocurrency users has a lot of impact on the global economy. Cryptocurrency brings hope but for some parties it threatens their existence.
How does cryptocurrency impact the global economy?
1. Cryptocurrency gives opportunity for unbanked people to access world financial sectors.
People who do not have access to banking can find breadth in several financial sectors. They can get funding from a variety of sources and means in the cryptocurrency community. There are several methods used to raise funds from cryptocurrencies such as mining, staking, trading, and crowdfunding. All these methods can be done without involving banks. There are many success stories from the way cryptocurrency communities raise funds. It is proved that cryptocurrency can stand alone without banks.
2. Thousands of jobs are being created in the cryptocurrency market.
New startups in cryptocurrency are growing like mushrooms in the rainy season. Therefore, the demand of job fields in cryptocurrency increases from developers, marketers, consultants, social media specialists, and writers. Most jobs in cryptocurrency can be done from remote area so that the job market is open world wide. The lists of employed people in cryptocurrency may not be registered in government data because the workers work remotely and most of the activities are in front of screen. There are many cryptocurrency marketplace like ethlance and other job marketplace. the absorption of a large number of workers has impact on economic growth.
3. There are new start ups and new millionaires.
Since the invention of bitcoin by Satoshi Nakamoto, this decentralized ecosystem has created new start ups and new millionaires. Coinbase is one of the most successful start ups. Brian Armstrong is the chief executive of Coinbase, the largest cryptocurrency exchange in the U.S. Armstrong co-founded Coinbase, which is based in San Francisco, in 2012. Brian Armstrong fetched himself an estimated crypto net worth of $308 million. Crish Larsen founded the company Ripple Labs, Inc., His asset is about $2.1 billion. The binance CEO Changpeng Zhao is also in top 100 cryptocurrency rich lists. He has more than $1.4 billion in cryptocurrency worth.
Richlist – 100 Richest People In Cryptocurrency
4. More merchants and retailers accept cryptocurrency payment.
Cryptocurrency is increasingly accepted by society. The large number of retailers accepting payments in cryptocurrency proves that this currency has value. There are thousands stores and services that accept cryptocurrency. The products and services range from apparels, restaurants, hotels, travel agencies, games, phone and electric bills , musics, sports, and many more products and services. Retailers accepting cryptocurrency payments are not affected by the issue of volatility. They still make profit from their business. This opportunity will also encourage to small retailers to accept cryptocurrency payment. Their products will be exposed to world wide marketplace because accepting cryptocurrency no need middle man in the payment.
5. The gig economy is growing.
Since there are new start ups in cryptocurrency, demand of gig works increases. There are many gig works that offered in job marketplace from micro tasks to bug bounty works.
Gig economy statistics show a free market system where organizations and independent workers engage in short-term work arrangements.
Source : What is gig economy
Freelance jobs in cryptocurrency are open to everyone everywhere. A worker can do the work remotely. The marketplace is usually managed by third party service to avoid scamming. The third party earn few percents from the contract payment. The payment is usually in cryptocurrency.
6. Crowdfunding platforms offer simple and decentralized investment systems.
ICO is a crowdfunding system that has raised million USD fund for new start up. iex.ec earned $12 million for six hours funding. Brave browser with BAT token earned $36 million funding in 30 seconds.
More start ups earn millions in ICO. This is good news for project creators to attract investors. Why is the system simple and effective? It is because the funding no needs third party and decentralized. The investment platform uses cryptocurrency payment like Bitcoin, Ethereum, Litecoin, Dash and other cryptocurrencies.
Those are the positive impacts of cryptocurrency to the global economy. Besides that, there are some bad effects of the growth of cryptocurrency.
1. There are many scam projects with ICO platforms.
The success of crowdfunding with ICO has lured scammers to work on it. They try to copy paste whitepaper and create fake team. They launch ICO and get funding from investors but they steal all the money with fake projects. Ifan and Pincoin run with $ 665 million crypto worth. Bitconnect, Onecoin, Centratech, and Plexcoin are other scam ICOs.
See ; Scam ICO and Projects
2. Criminal activities rise on cryptocurrency
Hackers, crackers and other cryptocurrency criminals try to use tools to steal from exchangers and personal wallets. Coincheck lost more than $500 million , Mt. Gox was robbed of more than $400 million and many more hacks that lost $ million in cryptocurrency assets. Hackers use many methods to steal money from DDOS attack, dust attack, cryptojacking and ransomware. The loss stories will continue. That is a very bad issue in the global economy for cryptocurrency ecosystem. It raises the question “If cryptocurrency secured, why it is hackable? ‘.
3. Hyperinflation of cryptocurrency causes many coins to die.
New coins are launched everyday. Market responds negatively so that many traders and users leave the coins and sell at low price. In the end, the coins have no value and die.
These are bad signals for the global market. Economists see that cryptocurrency is a bubble and has no value. Start ups create projects to raise funds only. They leave the projects and create other projects to fake the investors again.
4. Banks limit cryptocurrency transactions.
Bank of America has halted Bitcoin and cryptocurrency purchases on their credit card. There also some banks around the world that ban transactions directly to cryptocurrency. Cryptocurrency users use third party services to exchange their cryptocurrency assets with fiat.
5. Financial strict regulation inhibits cryptocurrency mass adoption.
Strict regulations make cryptocurrency difficult to develop. Many developers and investors fail to run their projects because they are hampered by applicable laws and regulations. Cryptocurrency is only used as an asset not as currency so that the use of cryptocurrency by the general public is also limited to digital asset transactions.
In conclusion, cryptocurrency opens many opportunities for the public, but there are negative aspects that cannot be denied. In the next year, the influence of cryptocurrency will be even greater. The growing number of cryptocurrency users makes this world even wider. Many new projects and inventions with smart contracts and dapps make cryptocurrency more acceptable to the market, public and governments.
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