08 Jun 2018
Everything is changing, including how we think about money.
While we are working and making money, we are always at the mercy of banks and government systems for how we manage that money, what it is worth, and how safe it is. When the Fed or central banks set interest rates, it affects us. When governments trade debt and sell their bonds, the value of our dollar, euros, or pounds goes up or down and there is nothing we can ever do about it!
Cryptocurrencies like Bitcoin, Ethereum, Dash, Ripple, and others are changing all that. The idea of cryptocurrency is to take back our money and eliminate the middleman – the bank.
What is It Anyway?
Cryptocurrencies are like digital cash designed to be quicker, cheaper and more reliable than our regular government-issued money. Instead of having to trust a government to create your money and banks to store, send and receive it, users deal directly with each other and safeguard their money themselves. Because people can send money directly without a middleman, transactions are usually very affordable and fast.
It is a relatively new system, and it has built-in protection against fraud and manipulation. Every cryptocurrency user records and verifies his or her own transactions, as well as the transactions of everyone else. The digital transaction recordings are called a “ledger” and it is available to anyone at any time. The public ledger makes transactions efficient, permanent, secure and transparent.
Because of the ledger, you don’t have to trust a bank to take care of your money with cryptocurrencies.
No one forces you to trust the person you are doing business with to actually pay you. You can actually see the money being sent, received, verified, and recorded by thousands of users. This system requires no trust. It is called a “trustless” system.
Who Benefits From It?
Well, that is the great part! You are the one who benefits – not the bank, not the Wall Street traders, and not the government!
Like most of us who have been working a long time to save and invest regular money in traditional ways, we want to be sure that it will be safe and keep its value. Crypto offers more protection and more transparency so you know at every moment how much you have and how much it is worth.
With cryptocurrency, you can essentially be your own bank! It is all about cash and how you manage it. The value of cryptocurrency is determined by trading alone, not by third parties and investment portfolio managers or people who could use your money to their own advantage – and eventually lose it in the process!
The benefits are incredible! When you buy real estate, for example, there are always people in the middle of the transaction that want to get a piece of the pie. Lawyers get their fees. Notaries get their fees. Contracts made in crypto can eliminate these people and allow you to make your deal directly. Person to person.
Cryptocurrencies are not controlled by exchange rates, interest rates, transactions charges or other charges of any country. That makes international transactions easy and effective and safe – not to mention faster! It saves you time and money that might have been wasted in transferring money from one country to the other.
Other benefits include being protected against identity theft, against unjust charges or suspensions. The crypto system is completely decentralized too, meaning that it is managed by its own network, not any central authority. Decentralization means the network operates on a peer-to-peer basis.
How to Use Cryptocurrency
Cryptocurrency is like any other form of money. You can use it to make purchases, for savings, for buying things like real estate, companies, and automobiles as well as using it for more day-to-day needs. Not every retailer or agent accepts crypto today, but the number of outlets allowing trades and deals in crypto is on a huge upswing. Soon it will be common practice and we may never have to carry cash again!
We are still at the beginning of really embracing cryptocurrency in daily life, but there are some early adopters who have already taken the plunge. There are crypto-cafés in Singapore, Toronto, Prague, and other places where you can get a cup of coffee in exchange for bitcoin. That includes Starbucks now too (working with iPayYou).
Another good use for crypto is in making donation. Often when we give to charities the worry is that half our money goes to line the pockets of middlemen and brokers. With crypto, you can be sure that your donation goes into the right coffer. We already mentioned buying property, but this is a good way also to make property investments as well.
Airlines are also getting on board little by little. Cheapair.com is the first US ticketing service to accept bitcoin and other cryptocurrencies. AirBaltic, BTCtrip.com, Destinia.com, and Expedia (for hotels, not flights) all accept crypto payments.
People are buying and selling art with cryptocurrencies. The University of Nicosia (Cyprus) is the first university to accept bitcoin payments. Tesla Motors accepts crypto too. The list is growing every day as people become more and more familiar with cryptocurrencies and more confident in using them.
Rainy Day Uses?
Saving for a rainy day is another use for cryptocurrency, but it is a risk. Many people are considering putting part or all of their retirement funds into crypto. The thing about doing that is that you need a good manager for your funds. Crypto reacts like stocks and bonds or forex – the value goes up and down. Although there has been fairly steady growth, including some fairly dramatic spikes and drops, a watchful eye is needed for this kind of investment.
Many advisors still believe that crypto is not for savings for that reason. You could invest a portion in bitcoin, of course, but not your main savings Part of your financial resources to invest in cryptocurrency but savings are not for investments - they are for your protection, and bitcoin is still quite variable.
It is important to remember that unlike cash or traditional investments, interest on your crypto-saving does not accrue. In this way, if you are not actively trading it, you could end up with big losses!
What to Watch Out For
Even though it is a trustless system that has a number of ironclad safeguards built in to keep your currency safe and your transaction transparent, there are a few things to watch out for.
The big thing to be careful of in crypto is the fact that it is not all virtual – you have to manage traditional cash and crypto at the same time. Keeping good track of your purchases and trades is extremely important. Perhaps the day will come when everyone uses cryptocurrency, and we will have no more use for banknotes and checks and savings accounts and pension funds, but for now, we still have them. In that case, you need to make sure everything is safe and transparent all the time!
Another thing to be careful of is the exchange you choose. There are a number of good and reputable exchanges that have had great track records. But the Wall Street Journal reports that “investors have lost more than $700 million this year  in hacks of two major cryptocurrency exchanges. The thefts at Florence, Italy-based BitGrail and Japan’s Coincheck bring total investor hacking losses since 2014 to around $1.4 billion.”
Incidents like this do not mean to shy away from crypto, just to keep your eyes open!
First Things First
The first thing you need is a reliable exchange to make your transactions. If you are new to cryptocurrencies, your first step would be to find an exchange that allows you to deposit money and make sure it stays safe. All exchanges require you to verify your account before depositing your funds by an identity proof and other personal information.
Which exchange you use will depend on what you want to do. Some exchanges have been around since the beginning and have a good reputation. An easy list is available on Finder, showing some of the details of these exchanges.
Of course, many people do opt to keep their wallet on their own servers, but unless you use a service like Dether , allowing you to buy and sell your crypto for cash, you have to register for an exchange, deposit money, verify your information, wait a few weeks, and then, after all that, you can finally withdraw your currency. It sounds like a bother, but using exchanges is the most common and practical way to buy and trade.
But this market is changing rapidly. The emphasis in the better exchanges is on keeping you, your money, and your cryptocurrency wallet safe.
Reputable services that have build up a strong portfolio of services in handling and protecting cash deposits, such as SecurSafe, will allow you to acquire cryptocurrencies, keep track of your buys and your cash on hand, and make sure you have all the information you need to make good decisions.
Making safe transactions with your money, virtual or otherwise, is a goal to which we should all aspire. We all need to be sure that our money will not be lost or diverted or picked off by hackers and thieves. This has been a reality of the banking world for centuries, but cryptocurrencies are a real risk reducer. Your identity and your wallet is safe as long as you handle it right.
If you want to know more about safe ways to manage your cash, transactions, and new cryptocurrencies, it pays to both read up as much as you can and then get expert advice on the subject. Get in touch with SecurSafe to see how you can always feel safe and be in charge of your money.