Is cryptocurrency truly revolutionizing the financial sector?

Posted by Fed Finance Canada in Fed Finance news
Posted at 07/02/2020
Is cryptocurrency truly revolutionizing the financial sector?
Although cryptocurrency is becoming increasingly well known and accepted in the financial world, this new currency remains elusive for many of us. This virtual currency, which can be used in the same way as cash, may well take digital wallets by storm in the years to come. 

Want to learn more about this concept and wondering if it's revolutionizing the financial industry? Our experts explain everything.

First of all, what is cryptocurrency?

Cryptocurrency is a completely virtual currency that is increasingly common in the world of finance. Unlike banknotes, coins and credit cards, it does not come in any physical form. Moreover, it allows you to make purchases, transfers, financial transactions or investments in the same fashion as "traditional" money.

Completely free from the control of banks or government institutions, this encrypted currency is based on a technology called "blockchain". In other words, it is a technology for storing and transmitting information that is transparent, secure and operates without any regulatory body.

Among the different types of cryptocurrency, there is of course Bitcoin, but also Ethereum, Monero, Ripple, Litecoin and many others.

Global financial transactions: possible with cryptocurrency

In the world of cryptocurrency, no entity holds the users' money. On the contrary, the money is kept in the cloud thanks to blockchain technology. This allows users to make instant online transactions, no matter where they are on the globe, without having to rely on a trusted third party to facilitate the exchange. These transactions are therefore free of any bank charges.

Cryptocurrency can therefore be considered a revolution in the financial sector, since it eliminates the need to go through an intermediary to transfer large sums of money. In contrast to the fiduciary money of the traditional banking system, users are masters of their own money.

The lack of need for an intermediary is a major concern for many financial sector professionals. Indeed, some are afraid of losing their jobs in finance if more people turn to encrypted banks.

No more data breaches with cryptocurrency

Cryptocurrency is also revolutionizing the financial sector by eliminating the flaws in the banking system. With advances in technology, banks have become vulnerable to data breaches, while "crypto banks" are more immune to hacking. 

Thanks to encrypted data, the information is public, but also confidential. This is accomplished through the use of an encryption key, which is a number or series of letters associated with a given transaction. This ensures that transactions are secure and the identity of the user is not disclosed.

A more equitable investment option

The traditional banking system is designed to work in favour of those who work in finance or know about finance and have money. This is why some people prefer to keep their money at home rather than deposit it in the bank.

With cryptocurrency, it is easier to control your finances without the use of intermediaries. The users of this currency have more financial freedom and are not dependent on an institution.

Cryptocurrency: a vehicle for change in the financial sector

As you can see from this article, cryptocurrency is an innovation that paves the way for a wide variety of solutions and improvements in the areas of financial transactions, security, investment and much more. Nevertheless, new innovations mean new jobs.

If you are interested in the finance sector, contact Fed Finance now. Our qualified consultants specialize in recruitment and can help you achieve your professional goals.