If 2017 was the year of bitcoin, it was also the year in which many investors dug in their heels and flatly refused to accept cryptocurrencies. While new investors into the space hoped to capitalize on dramatic price fluctuations, others criticized cryptocurrencies for being a bubble and a source of speculative investing or even gambling.
While mainstream business may still be a ways off from adopting virtual currencies to the same degree that it has embraced traditional fiat currency, there are still some ways in which the cryptocurrency space has impacted (or may impact in the days to come) the world at large. Here are a few of those benefits, according to Nasdaq.
1. Provide New Ways to Crowdfund
One of the major benefits of cryptocurrency is that it has opened the doors to new modes of crowdfunding. Whether through ICOs or other types of token sales, startups and other projects have access to a wider pool of potential funders than ever before.
2. Minimize the Potential for Fraud
Cryptocurrencies were founded on principles of security and privacy. (See more: The Rise of 'Private' Cryptocurrencies.) While there have been several prominent instances of fraud within the space, the fact that it is constantly evolving has ensured that security measures are always working to combat the next possible attack.
And because cryptocurrencies are not associated with a bank account or cash funds, and because they're only transferred electronically through blockchain ledger systems, they are likely to reduce fraud overall in the future.
3. Revolutionize the Money Transfer Process
Some mainstream means of transferring money may take many days to clear, particularly if the money is being transferred internationally. Cryptocurrencies offer a streamlined system that doesn't require the same types of checks and balances. In turn, they could allow for potentially faster transfers.
4. Promote Scientific Advances
Blockchain technology allows data and information to be stored and shared in new and secure ways. With access to a wider pool of information and with fewer barriers to sharing knowledge, it's likely that many industries could see innovation pick up as blockchain becomes more popular. Scientific advancements could become easier to facilitate in the process.
5. Act as a Stable Alternative to Unstable Currencies
The currencies of some countries are unstable, suffering from inflation and other issues. Cryptocurrencies, which are decentralized and accessible across most of the world, could serve as a safer alternative in those cases.
6. Open Up Financial Control to the Individual
Many people are reluctant to keep their money in a bank or other financial institution, but the alternative of keeping all of your money in cash and at home is not the safest option. Cryptocurrencies could provide an alternative access point to the broader financial world in these cases, allowing individuals more control over their own finances in the process.
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrencies.