Cryptocurrency is a virtual or a digital currency that has been designed to function as an exchange medium. Cryptography secures and verifies transactions; it also controls the creation of new cryptocurrency units (Cointelegraph, 2018). It has not been accepted in all places, but it is getting more and more known to people. Along with its effects on global economy, it has both its good and bad sides as explained below.
Cryptocurrency has its effects on the global economy, for example, it challenges the Dollar standard. US Dollar dominates the global economic affairs, but it has centralized transactions. With the decentralized cryptocurrencies, the impact of economic sanctions and trade would be changed. It also cuts out the middleman in the name of banks and other institutions. They also simplify the crowdfunding process; it is sold directly to the public (FundYourselfNow, 2018).
Advantages of cryptocurrency are: they provide a fast and easy payment, where there is no use of credit cards or signing of documents. It is also secure as it uses cryptography and only the wallet’s owner can make transactions, it is also more secure than carrying hard cash. Banks and other companies charge transaction fees, cryptocurrencies do away with these fees and when they happen, the fees are very low. It eliminates fraud cases as a transaction cannot be reversed once it is done.
Finally, cryptocurrencies also have their disadvantages. For example, when a transaction goes to a wrong person, there is no way to reverse it. It is also not a widely accepted method of exchange as many prefer using real money. Also, if you lose the system in which you have stored your digital currencies, there is no way to get it back even if you complain to the police, also, no other person can get it (Blogbucket, 2017).
References
Blogbucket, (2017), What is Crypto Currency and what are the Advantages and Disadvantages of it? https://www.blogbucket.org/what-is-crypto-currency
Countelegraph, (2018), What is Cryptocurrency. Guide for Beginners. https://cointelegraph.com/bitcoin-for-beginners/what-are-cryptocurrencies#history
FundYourselfNow, (2018), How Cryptocurrency is Disrupting the Global Economy. The Mission. https://medium.com/the-mission/how-cryptocurrency-is-disrupting-the-global- economy-89347581aa93