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The inception of cryptocurrencies can be traced back to the creation of Bitcoin in 2008, which marked the beginning of a new era in the world of digital currencies. After the Wall Street crash, there was a prevailing sense of distrust towards traditional financial systems and central banks. Bitcoin, and by extension, blockchain technology, therefore, was not only developed for facilitating payments, they were also created with the aim of serving as alternatives to the established financial system.
Since then, the infrastructure surrounding cryptocurrencies and blockchain technology has flourished, and the world has witnessed the development of multiple digital currencies, each with distinct characteristics and use cases. Today, the decentralized finance (DeFi) ecosystem is known for much more than just payments.
This article takes a deeper look into the many facets of blockchain technology and cryptocurrencies, such as their utility as a store of value, the new financial ecosystem they represent and the economic independence and empowerment they provide millions of users around the world.
Blockchain technology
Blockchain technology is a decentralized and distributed public ledger that records and verifies transactions across a network of computers. Its name is inspired by the way in which this ledger is built, as each new piece of data, or new transaction, is entered into a “block”. Each block contains a list of transactions, a timestamp and a reference to the previous block, which therefore creates a chain.
But blockchains can be leveraged for more than simply recording transactions. One example is the creation of smart contracts. These self-executing contracts are agreements that contain the terms of the contract written directly into code and are designed to automatically execute when established conditions are met. Ethereum was the first blockchain to revolutionize the industry with the introduction of smart contracts.
Another field leveraging blockchain technology beyond the limits of cryptocurrencies is healthcare. Given that blockchains can be used to safely store and share patient data among different healthcare providers, medical centers can guarantee data integrity, mitigate the risk of breaches and make data interoperable among other healthcare providers across the sector. Some examples of blockchain healthcare companies include Akiri, Patientory and Avaneer Health.
Cryptocurrency as a store of value
Since the inception of cryptocurrencies and the blockchain, digital assets such as Bitcoin are also frequently compared to more traditional assets such as precious metals (gold or silver) and have gained popularity as an alternative for investors.
Despite market uncertainty and volatility, the value of Bitcoin has continued to grow. In fact, it is sometimes referred to as “digital gold”, as it follows the same requirements as those applied to the precious metal, which include global acceptance, liquidity, supply, divisibility and portability. As such, many investors view bitcoin as the ultimate store of value.
A new, decentralized financial ecosystem
Decentralized finance, or DeFi, was designed to provide traditional financial services in a digital, decentralized ecosystem, using cryptocurrencies and stablecoins as a medium of exchange. This ecosystem enables worldwide, peer-to-peer transactions 24/7, given that the network operators (miners) who enter these transactions into the blockchain are located across every time zone.
This decentralized system not only increases the speed of payments and transactions, it also drastically increases accessibility and financial independence. Given that DeFi is not governed by a central authority, it is globally accessible. As long as users have an internet connection, they can buy, sell and transact using cryptocurrencies. This in turn empowers users who may not have access to traditional banking systems in countries where they are heavily controlled by central governments.
As DeFi gains traction and the crypto consumer community grows, so does the number of merchants looking to sell to this increasingly affluent sector. As the premium crypto solution for payment processors and businesses, ForumPay enables transactions from cryptocurrencies into fiat currencies, in order to bridge the gap between these adjacent ecosystems. Hundreds of thousands of merchants have already signed up to accept crypto payments through ForumPay, ensuring crypto consumers can access an unrivaled number of goods and services. A number of businesses are also using ForumPay to pay their clients and partners in cryptocurrency without entering the crypto space. Our system can facilitate automated FIAT to cryptocurrency payouts to external wallets.
In short, crypto and the blockchain offer much more than payments. Cryptocurrencies, particularly bitcoin, serve as alternative stores of value, making them attractive assets for long-term investors, while the wider DeFi system fosters global economic independence and financial empowerment by enabling low-cost, 24/7, peer-to-peer transactions. As the crypto community grows and DeFi gains widespread acceptance, ForumPay will continue to facilitate seamless transactions between cryptocurrency and fiat currencies.
If you are a business and have yet to start accepting payments in cryptocurrency, book a meeting with our crypto payment experts to find out how. They are available to answer all your questions. Alternatively, visit forumpay.com for more information.
