Understanding cryptocurrencies. What are they aimed at?
To begin with, cryptocurrencies are a kind of digital asset. They are decentralized networks based on the technology called the blockchain. Due to their decentralized nature, and being distributed across a large number of computers, theoretically, cryptocurrencies are immune to any central authorities such as the governments’ manipulation or interference. Therefore, in some experts’ viewpoint, cryptocurrencies will have a disruptive effect on many industries, specifically finance and law. However, these digital assets have some advantages that cannot be neglected. For instance, unlike banks, their system won't collapse at a single point of failure as they are decentralized networks. Moreover, they include faster and cheaper money transfers. On the other hand, cryptocurrencies have some drawbacks as well. Take high energy consumption for mining activities, use in criminal activities, and price volatility as examples. All in all, crypto-assets are becoming popular because of their skyrocketing value and their implementation in cross-border transfers. For example, you can think of El Salvador as the first country to allow Bitcoin as legal tender for monetary transactions in December 2021, or even in Japan, the Payment Services Act defines Bitcoin as a legal property today. If you need more explanation, please watch the video.