This may sound a bit strong, but banks and traditional payment systems do limit your freedom.
Imagine you live in the United States and beloved father, whose birthday coincided with Independence Day, living in another country. As with all local banks will be on vacation, you may face a significant delay when sending money for a new mower to a foreign bank account.
To avoid this, you are forced to use PayPal, a special mobile application or the traditional money transfer services such as Western Union. However, there is no guarantee the money will arrive in time or will end up in the pocket of your relative, because all humans make mistakes. For example, two strangers in the US after finding themselves in a thriller story, including bank accounts frozen and suspicion of fraud, shortly after one of them mistakenly sent $ 100 to another instead of her daughter.
Finally, the financial intermediary does not care much about your father’s birthday gift. You are forced to pay a commission depending on the amount you send and the country where the recipient lived, even if you can not afford. Read more..
Okay, but what is different from the crypto?
The main idea behind the crypto is to enable peer-to-peer (P2P) payments at any time, while eliminating the middleman.
Let’s start with the specific examples provided by Jameson LOPP, lead engineer at security company blockchain BitGo multisignature. He described a typical holiday in the US – President’s Day on February 19, 2018, local banks – as usual – was closed and did not provide financial services to individuals. Meanwhile, Bitcoin (BTC), a P2P settlement system, capable of processing more than $ 1 billion in transactions, and more than $ 7 billion worth of Bitcoin traded on the day.
Yes, crypto ecosystems also have a transaction fee. The miners, who approves the block, usually some sort of transaction costs. Typically, you can choose between slow and fast transaction, or crypto services do it yourself. However, prices are not drastically different, and there are cases in history when the user crypto crypto successful in transferring large sums of money for almost nothing.
For example, in October 2018, sent 29 999 BTC Bitcoin investors (valued at approximately $ 194 million at the time) – BTC the largest transactions in recent months – with a $ 0.01 fee. Given that it costs about 1% of the transaction to clear payment of $ 1 million in a fiat currency, to send a $ 194 million transaction could easily cost hundreds of thousands of dollars with legacy systems.
It sounds good! Tell me more about the case of the use of certain crypto.
Crypto popularity continues to rise among people who do not have bank accounts or live in countries with high inflation rates.
Venezuela has been struggling with hyperinflation in the midst of social and political crisis which severely for several years now. While national fiat, bolivar sovereign, saws dizzying 80,000% inflation in 2018, Bitcoin trading volume reached an all-time high in February 2019. As explained Cointelegraph, Venezuela, which failed to make savings in the fiat rapidly losing its price, began to buy Bitcoin to face economic collapse, with weekly trading volume reached over 2,000 BTC on LocalBitcoins P2P exchange.
Meanwhile, U.N. Women – the UN body for gender equality and the empowerment of women – who tested blockchain cash transfers to help the refugees do not have a bank account in the camps of Syria. Refugee women, who participated in the cash U.N. Women’s work program, so they can earn money directly, without the assistance of a third party such as a bank. Blockchain solutions enable them to buy food using iris scans instead of cash or cards. To access their funds, participants scan their eyes, which then links to an account in blockchain.