With more people working freelance, are cryptocurrencies a safe and reliable alternative for receiving payments?
Cryptocurrencies created a healthy alternative for sending and receiving payments through the internet. Previous to these digital cash options, we relied heavily on the banking industry, third party wire transfer providers like Western Union, and payment aggregators like PayPal.
The issue here is that by relying on such few options, these operators hold the master key to your money. Meaning, if for any reason they wish to freeze or withhold your funds indefinitely, they can do so. This complete authority over people’s funds is wildly unfair, especially when people depend on these funds to live every day.
For this reason, decentralized currencies like Bitcoin, Ethereum, etc. provide individuals a way to take back control of their finances. Nevertheless, the entire space is relatively new and still has a few kinks to work out.
Safety is probably one of the biggest selling points for cryptocurrencies. The underlying technology used to create them, called blockchain, has been widely acclaimed for its superior security protocols.
Without getting into too much detail, a blockchain is a hash-encrypted method of record-keeping that’s kept over a network of distributed nodes. In layman’s terms, it’s a secure way to keep an unmodifiable record, or ledger, of information.
Though it seems like a pretty specific solution, keeping a reliable record of information can be an invaluable asset to many sectors. With banking, for example, as money is moving in and out of the bank vault, it’s important to keep a record of who specifically is taking funds in and out so that it’s clear how much money is left in each person’s account.
This example is exactly the way cryptocurrencies work. Essentially, the only way to know how much money everyone has in their wallets is by keeping a record of all transactions. Consequently, when this information is kept on a central…