From multinationals to individuals, everyone is betting on blockchain technology and related projects. Blockchain is one of the latest technologies that are defining every industry, from the supply chain to finances. However, the finance sector has been disrupted more than others because blockchain and native cryptocurrencies were designed to provide alternatives to traditional banking. If you are new to the world of blockchain, the best point to start is to understand how it works.
In this comprehensive guide, we take a closer look at blockchain and crypto coins to help you understand why it is the right time to start using them.
What is Blockchain?
This is a type of distributed database or public ledger that is shared among the different nodes of the computer network. The database consists of the information of all the transactions that take place on the network. The information is added in the form of blocks that link up to form a sort of a continuous chain.
This is why it is referred to as a blockchain. Some of the common blockchains include Bitcoin, Ethereum, and Cardano.
For any person to use a blockchain network for running a transaction, perhaps sending funds from one wallet to another, he must use the native currency. These are referred to as crypto coins, and they only work in their respective blockchain. So, if you are using the Bitcoin blockchain, only BTC can be used. If you need to make transactions on a different platform, it is important to convert your coins to the supported cryptos. Common coins that you need to know about today include:
- Bitcoin (BTC): Has a market capitalization of over US$1.08 trillion.
- Ethereum (ETH): Market capitalization of US$ 557 billion.
- Binance Coin (BNB): Market cap of slightly over US$104 billion.
- Tether (USDT): Market cap of US$73 billion.
The numbers above are a reflection of the respective coins’ market status as of 1st Dec 2021.
Why You Should Start Using Cryptocurrencies and Blockchain Right Away
The main benefit of using blockchain and cryptocurrencies is that you can eliminate all the intermediaries, such as banks or credit card companies, meaning that your transactions are direct. Therefore, you are your own boss in most matters about finance, whether it is crypto lending or sending funds (check our article about Adrian Cheng).
Other reasons why you should start using cryptos include:
- All Transactions are Confidential
When you send money to a friend using bank transfers, your personal details are available to a long list of people. The cashier who served you, the bank managers, and the country’s top political administration can pull the details in minutes. If this information is leaked to malicious people, you can be targeted with legal suits to extract the funds in legal fees.
The lovely thing about cryptocurrencies and blockchain is that all transactions are 100% anonymous. When you send or receive funds, only a string of codes and numbers is available to validators. So, there is no way they can know your personal details. Indeed, they only confirm that the account has ample details to confirm transactions, and all other details remain anonymous.
- You Get All Financial Services At a Lower Costs Compared to Banks
The main reason why sending money, taking loans, and asset management through banks is challenging is that they have a lot of overhead costs. They have bank branches downtown, long lists of staff, and other obligations that force them to target high-profit margins. However, you can now enjoy lower transaction costs by working with blockchain and crypto coins.
Because there are no intermediaries and the driving force is not profit, the cost of sending money or other transactions is only at a small fraction of what you could have paid in a traditional bank.
- No Background Check is Done when Taking a Crypto Loans
Unlike banks that dig so much information from clients applying for loans, you will be surprised to realize that no additional details will be required. If you have some coins to put forward as collateral, nothing else is required to get a loan from a DeFi platform. The money is also released fast so that you can use it immediately for your needs.
These are only a few of the reasons why you should start using crypto coins right away. There are so many others that you will find enthralling. Visit hi.com to learn more about blockchain and cryptos and take advantage of the growing popularity and opportunities.