After years in the downturn market, El Salvador's Bitcoin holding has risen to a 3% gain over its investment.
As more people have become aware of the potential benefits and use cases of cryptocurrencies, digital funds, and blockchain-based assets, the adoption of the decentralised industry has steadily increased. Since the global pandemic, we’re seeing more investors and traders looking to hedge their funds against inflation, opting to take digital currencies into their portfolios.
Beyond inflation, there are a few factors that have driven the adoption of decentralised assets include:
1. Security and privacy that comes with decentralisation
Unlike traditional financial systems, which are often subject to government or financial institution control, decentralised assets are managed by a decentralised network of computers and users, giving individuals greater control over their financial transactions and reducing the risk of government or institutional interference.
Additionally, the use of cryptography in digital assets provides an additional layer of privacy, making it more difficult for third parties to track or intercept transactions.
2. Global accessibility
Current financial systems often require individuals to have a bank account or meet other requirements, whereas the decentralised industry can be accessed with much less requirement by anyone with an internet connection and a digital wallet. This has the potential to greatly expand access to financial services, particularly in areas where there is a lack of access to traditional financial systems.
For example, in some developing countries, a large portion of the population may not have access to traditional banking services. With a smartphone and internet connection, though, individuals can access cryptocurrencies and can make transactions with anyone else in the world, regardless of their location or financial status. This can help promote financial inclusion and provide new opportunities for individuals and businesses to participate in the global economy.
3. Low transaction costs
Traditional financial transactions often involve high fees, particularly for international transactions, which can be costly on both finances and time. Digital assets, on the other hand, often have lower transaction fees, and can be sent and received quickly and easily, making them an attractive option for businesses and individuals looking to save money on transaction costs.
Programmability refers to the ability to create custom applications and self-executing smart contracts that run on top of a blockchain. This allows for a wide range of decentralised applications to be built on top of a blockchain, including decentralised finance (DeFi) applications, supply chain management systems, and more.
The programmability of decentralised assets offers several advantages over traditional financial systems. It allows the creation of complex financial products and services that are transparent, efficient, and can be executed automatically without the need for intermediaries. Additionally, smart contracts can help reduce the potential for fraud or error, as they are executed automatically based on predefined rules.
Programmability also offers new opportunities for developers and entrepreneurs to create innovative new applications and business models that leverage the unique features of digital assets. This has led to a proliferation of new projects and startups in the digital asset space, many of which are focused on creating new DeFi applications, decentralised marketplaces, and other DeFi platforms.
5. Investment opportunities
Since their inception, many cryptocurrencies have seen significant appreciation in value, leading some investors to see them as a potentially lucrative investment opportunity. Additionally, some decentralised assets, such as stablecoins or assets that offer staking rewards, offer investors a way to earn returns on their holdings without taking on significant risk.
As more people begin to see the potential of these assets, it is likely that adoption will continue to grow in the coming years.