Cryptocurrencies represent a whole new, decentralized paradigm for money. Instead of centralized intermediaries like banks and financial institutions, this system uses trust to govern transactions between two parties. Considering this, a cryptocurrency-based system prevents the likelihood of a single point of failure, such as a vast bank, causing a chain reaction of crises to grow globally, similar to the one that was sparked in 2008 when American institutions failed.
Cryptocurrencies facilitate direct money transfers between parties since the need for a reliable third party, such as a bank or credit card issuer, is removed. Decentralized transfers like proof of work or stake are protected by public keys, private keys, and other incentive systems.
Leave a Reply