More and more people are turning to use cryptocurrency over other more traditional methods of currency. There are many reasons for this; one of the reasons is that people feel that cryptocurrency is more secure than traditional currencies. There are a few facts about cryptocurrency that work to support this argument.
Cryptocurrency has much more password protection than other forms of currency. For example, if someone were to steal your wallet, there is absolutely nothing stopping them from spending all of your cash. While they cannot use your debit card to take money out of an ATM without knowing your pin, they can use your debit card to make purchases. Depending on which credit card company you use, a thief may or may not be able to use your card without knowing the pin. However, with your card, they would have most of the information they would need to call your credit card company, impersonate you, and get a new pin. This is made even easier if you keep your social security card in your wallet, which you absolutely should never do. Even if this is not possible, pins are only made up of four digits, so it’s difficult, but not impossible, for someone to guess your pin.
To use cryptocurrency (using Bitcoin as an example), you need to remember your password to access your money. These passwords are not typically like pins. You can use numbers, letters, symbols, and more to create a password. Whether you use a single sign on authentication or another method, your money is going to be much more secure than using a pin. Cryptocurrency is not held in a physical wallet, so it is much more difficult to steal as well. While the average pickpocket can steal all of a person’s money, it takes an advanced hacker to have a shot at stealing cryptocurrency.
One of the biggest things that set cryptocurrency apart from other types of currency is that it is not tied to any one country or group of countries (like the euro). Its worth is also not attached to a physical object, like gold, as was used with the gold standard. However, it should be noted that no country currently uses the gold standard, as most governments switched away from it to fiat currencies (where each country’s currency has its own monetary value) after the 1930s. Moving away from the gold standard greatly varied how much each country’s currency was worth in comparison to each other and had a large impact on inflation (arguably in a negative way).
Along with not being connected to a country or physical object, cryptocurrencies are not held at a bank. This helps to get rid of some of the risks associated with saving money in a bank. The average bank makes a good chunk of change by investing customer money. For this reason, a lot of the money that is deposited in a bank is not actually held in the bank. Banks do keep some money on hand to deal with daily transactions, but by no means do they hold all of the money that people have deposited into their checking and savings accounts. If a bank’s investments lose money, the bank itself loses money. If a bank loses too much money, it has to shut down. This means that people who have saved money with the bank may also lose money. Banks that have FDIC or NCUA insurances will be able to give customers up to $250,000 per account back if the bank goes under. However, if a person has more than $250,000 in their account when the bank goes under, there is no assurance that they will get that extra money back.
Like any other kind of currency, using cryptocurrency comes with some risks. Looking at the facts, cryptocurrency seems to be one of the more secure options. Will you invest or stay with traditional currencies?