No Inflation
One of the lingering financial problems affecting the world is inflation. The value of nearly every currencies around the world decreases by at least a percent or two every single year. The reason is because governments print more money than they take out of the system causing the value to go down.
Well, this problem is guaranteed not to occur with cryptocurrencies. Sure, the value might fluctuate, but this isn’t because of excess money printing. They each have been made to have a finite amount. In the case of Bitcoin, there will never be more than 21 million. No extra Bitcoins, no inflation.
They are Global
When you travel you have to convert your local currency to the currency of the place you are going and when you do, it costs you. Then when you come back home, you have to do the same thing and pay again. Also some countries have very unstable currencies and if you own them and the currency collapses, you lose everything. Cryptocurrencies are global. They never have to be exchanged and if a country collapses, you still own your cash.
Almost Untraceable Transactions
It is true that today Bitcoin and some other cryptocurrencies are being used for illegal activities and this points to the need for regulation, but the nature of cryptocurrencies is that they shield the user from detection. As regulations come in, this might change some.
There are other benefits that will come about when things settle down a little bit like ease of use and that it is an appreciating asset. Cryptocurrencies are the future.
Hey, I really like the 2. and 3. point you made about "They are global" and "ALmost untraceable transactions". I want to add to the 1. point about inflation that inflation is not necessary a bad thing - the economic theory agrees that deflation is much more harmful than inflation and hyperinflation is, of course, the most harmful (look at Weirmar Republic in 1930s). The reason why central banks are trying to keep it around 3% is that there is a 3% buffer against deflation and at the same time 3% is not that large to have all the negative effects that are associated with hyperinflation.
Also, inflation does not happen just because the central banks are printing money (these days, not even this is happening. They do it by buying and selling bonds on the market). A more prominent cause of inflation happens when the unemployment is low => there is not that much high quality labour on the market => firms have incentives to raise salaries to keep their employees => this will cause the products that the firms are making be more expensive => that is inflation.
Of course there are other reasons but this is the gist of it and moreover, all of the reasons are still "kind of" a theory. After all, economics is a human science so nothing is certain.
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Wow, thanks for your great comments. I agree with them all and they are noted. My intention was to give people about why people were so interested in cryptos and from that standpoint, the inflation created by government action, particularly printing money (The US, Japan and the EU recently), works against the value of a currency. In terms of whether inflation or deflation is better, which do you think is better over time? Would it not be better to have something be able to retain its value over time? If this were the case, people could save and have those savings retain their purchasing value. As it is people have to work for decades just to accrue enough money to stop working (if they can even do it). Again I appreciate your thoughts.
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