Most people who own cryptocurrency acquired either through mining or bought with fiat currencies usually decide the market fluctuations to come to a point when they sell the acquired crypto at a high price. Although holding cryptocurrencies is proven to bring profit in the long run, there are significant market fluctuations in the yet-to-mature crypto market. These result one cryptocurrency holders seeing their digital wallet value diminishing and needing to wait for months, sometimes years to go back to a breakeven. Many who have invested in crypto between September and December 2021, when the market value of the cryptocurrencies was historically high are still on heavy loss.
Blockchains are evolving and slowly becoming mainstream. The transparency that blockchains bring and the idea of using immutable ledgers to facilitate the process of recording transactions and tracking assets are widely recognized. The digital currencies and tokens that support the main blockchains are here to stay and their usability will grow with time.
The development of blockchains and the process of creating new-generation internet infrastructures go hand in hand. A blockchain needs huge infrastructures and a lot of computing power to work. The requirement to have a fast, secure, and scalable blockchain technology requires a decentralized infrastructure. So, there is a whole new industry for decentralized cryptocurrency-powered platforms where users can buy hosting with crypto or buy various digital products and services with digital currencies.
Platforms like ServerWhere.com, which are not single-entity owned providers, but decentralized organizations of independent hosting and cloud services providers, create new market niches in the IT infrastructure service market. The main concept behind such decentralized organizations is not just to bring to a single marketplace, their together their underutilized computing infrastructure resources. The bigger idea is to create a market of technology infrastructure services that is powered 100 percent by cryptocurrencies.
It is worth comparing the benefits of spending the cryptocurrencies and turning them into real everyday payment methods versus holding them as passive assets.
The Benefits of Spending Cryptocurrencies
Cryptocurrency transactions are much faster than traditional banking systems, especially when it comes to cross-border transactions. When we pay in crypto the cost of the transaction is much lower than the banking fees and the cost of the online payment systems which vary between 1% and 4%, with high-risk transactions being charged fees around 10% of the transferred amount.
Freedom to Use Your Money (FUYM)
While banks impose various terms and restrictions on individuals and entities to use their own money, digital wallets, especially non-custodial wallets give the cryptocurrency owners 100% control over their own digital money.
Cryptocurrencies allow individuals who cannot use banking services in foreign jurisdictions easy access to their funds, especially through debit cards that allow their holders to convert their crypto into fiat currencies, either with few clicks on instantly thought automated and transparent exchange rates.
Here comes platforms and marketplaces like ServerWhere. Merchants are still reluctant to adopt cryptocurrencies as payment methods, as most of them do not understand crypto, while others are forced to compile with various regulative regimes, imposed by the national tax authorities. When there is a business platform, owned by a decentralized autonomous organization, however, the merchants who become members are facilitated in their efforts to utilize the cryptocurrencies in their business transactions.
Benefits of Holding Cryptocurrencies as Assets
Potential Value Increase
Despite its huge price volatility, the flagship cryptocurrency Bitcoin follows a stable upward trend pattern. Unless someone bought Bitcoins between February 6 and May 14 2021 or between August 12 and December 31, 2021, they are on profit with the levels of BTC price against the dollar as of January 14, 2023.
While Bitcoin is worth being held as an asset, the other cryptocurrencies feature high volatility, leading to the potential for substantial gains for those who hold them as assets.
*Diversification and Anti-Inflationary Asset *
Investors who hold cryptocurrencies look at their crypto investments as a diversification of their investment portfolio, that helps them reduce the overall risk of being solely dependent on traditional asset classes. In theory (yes it is a theory) the major cryptocurrencies, and Bitcoin in particular, are considered as a hedge against inflation. The nature of Bitcoin - with its fixed supply - must be a non-inflationary asset.
However, although it is arising from the developments of the traditional economy, the digital one, and its blockchain and cryptocurrency niches in particular, write their own rules and sail into vast unexplored, and untested waters. Under any normal circumstances, Bitcoin and other cryptos should protect investment against inflation. However, in crises and under various circumstances the value of cryptocurrency assets may drop sharply and result in heavy losses, even bankruptcies.
Spending cryptocurrencies like traditional fiat money or holding them as we do with stocks and other financial assets is a decision that depends on the market conditions, and trends, and mostly by the owner's decision. The regulatory environment is another factor that plays an important role in the behavior of cryptocurrency holders.
There is one thing for certain, however. If we can leverage today's value of our crypto and we can use it to boost our economic activity while creating value and making a profit, there is no point in holding it and waiting for the future to decide what its value would be.
So, my simple advice is, to spend some of your crypto assets wherever applicable, instead of spending money.
Top comments (0)