4 key attributes of cryptocurrency also adopted in the financial world

It’s been about 14 years of cryptocurrency’s existence and it has played a crucial role to disrupt the financial world. we’ve been through many incidents, significant crises both in related businesses and bear market periods. Despite the occurrence of all these events, there are new players in financial industry stepping into the crypto world. Let’s take a look at 4 key attributes of cryptocurrency also adopted in the financial world.

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Decentralization 

In traditional fiat currencies, central authorities and banks, control the financial system. However, with cryptocurrency, these transactions can be processed and validated by blockchain technology, which is owned by no-one. Solving the centralized trust issue alone is a big enough innovation to give cryptocurrency staying power and making transparency a reality.

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Immutability

The immutability of cryptocurrency mean that it is impossible for anyone but the owner of the respective private keys to move their digital assets and that transactions cannot be changed once it is recorded on the blockchain.

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Scarcity

Fiat currencies have an unlimited supply, as the central banks can issue and/or print as much fiat currencies as they want. The inflationary nature of fiat currencies would mean a decrease in the value of the currency over time.

On the other hand, many top cryptocurrencies such as Bitcoin or Ethereum have a maximum supply, making them deflationary by nature. Any increase in the demand or adoption of the cryptocurrency will cause a corresponding increase in the price.

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Divisibility 

The ability to be divisible into smaller units. Both cryptocurrencies and fiat currencies are divisible, but crypto is often more so. For example, Bitcoin can be divided up to 8 decimal places.

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Data from
https://www.businessinsider.com/personal-finance/what-makes-crypto-valuable#key-characteristics-of-a-currency-
https://medium.datadriveninvestor.com/cryptocurrency-basics-3-key-characteristics-and-why-they-matter-7348242abe18
https://medium.com/the-capital/key-characteristics-of-cryptocurrency-and-why-do-they-matter-to-you-5f33e483a40f
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Disclaimer:
Cryptocurrency and Digital token are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to own risk profile. Past performances do not guarantee future performances.

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