Cryptocurrency’s Contribution to Financial Freedom

Financial freedom is essential to liberate millions of people from the bondage of financial inequality. Although individual and community preferences differ, financial freedom essentially implies freedom from debt cycles, financial inadequacy, and unpreparedness for financial emergencies. In this regard, cryptocurrencies such as Bitcoin and Ethereum can play a crucial role. Bitcoin, being the most popular cryptocurrency, can unleash the power of decentralized finance and disrupt the existing monopoly of centralized financial institutions. 

Potential of Cryptocurrencies in Granting Financial Freedom

Financial freedom is a process that involves the fulfillment of certain criteria that guarantee relief from debt cycles and pave the way toward financial adequacy. It is therefore necessary to highlight the potential of cryptocurrencies in granting financial freedom.

Facilitate Borderless Transactions

Borderless transactions are a key feature of decentralized finance. Cryptocurrencies like Bitcoin, Ethereum, and other cryptos are traded on crypto exchange platforms that run on Blockchain. This can prove to be a major benefit for people interested in fast international transactions. Moreover, facilitating borderless transactions can provide easier access to international markets and increase the chances of financial freedom.

Transaction speed

Transaction speed is highly crucial for most businesses nowadays. Cryptocurrency exchanges have very fast transaction speeds compared to wire transfers. For example, a wire transfer may take one full day for settlement, and stock trades may take 72 hours. In contrast to these slow systems, crypto exchange platforms settle international transactions within a few minutes. Financial freedom is incomplete without having high transaction speeds. This is because in businesses conveniences affect the profitability of a firm.

Superior Security Systems

Cryptocurrencies and their exchange platforms have superior security systems. To achieve monetary independence, securing assets is of paramount importance. Crypto exchanges fulfill this necessity by providing private keys to crypto wallets. These keys guarantee full-fledged protection as it is nearly impossible to access funds without these keys.

Privacy

Centralized financial systems not only perpetuate financial inequality, since the entire system is controlled by the governments and central banks, but it also stifles freedom by compromising privacy. Contrastingly, decentralized finance guarantees better privacy and it is perfectly possible to carry out transactions by keeping pseudonyms. Online anonymity, therefore, invariably leads to better prospects of financial security and freedom.

Lower Transaction Costs

Centralized financial institutions such as banks and loan-providing institutions often charge high fees for carrying out transactions. This decreases the possibility of achieving economic emancipation because it reduces the financial savings of individuals and the profits of business enterprises. High transaction cost also deters many underprivileged people from opening bank accounts in many places of the world. Comparatively, cryptocurrency transactions are cheaper in both transactions and settlements. Median transaction fees remain lower than wire transfer fees of congested blockchains. 

Also Read– Applications of Decentralized Finance in Daily Life

Bottom Line

Cryptocurrencies can play a tremendous role in contributing to financial freedom. From the perspective of transparency, privacy, transaction costs, security, and speed, cryptocurrencies are ahead of most centralized currencies. The advantages that decentralized finance offers can break free of the monopoly of centralized traditional financial systems. Therefore, it is not an exaggeration to suggest that cryptos can liberate many underprivileged people from the shackles of poverty and financial inequality.