Cryptocurrencies as Efficiency, not as a Marketplace
Cryptocurrencies have become an established reality that solves problems beyond pure speculation.
Much has changed in people's mentality about cryptocurrencies from their early stages to the present day. The most sceptical, who saw them as a passing fad, are some of those who now find them an interesting alternative that can go beyond their preconceived ideas.
What seemed brief and ephemeral has become an established reality that is moving faster and faster towards legislation that goes hand in hand with existing products. In the meantime, consumers around the world continue to expect the novelties that the market offers on a daily basis.
Often, one of the prejudices associated with the crypto ecosystem is to understand it solely from a speculative and short-term point of view, fostering the idea of easy money overnight.
The belief that they are simply currencies in their strictest definition of transactional exchange causes a false notion that can often be affected by our praxis.
In fact, this new ecosystem bases its revolution on a much more subtle perspective, where the great difference proposed is centred on the separation between monetary value creation and the state. Monetary policies that have always been executed by central banks are now dictated by the market itself.
Cryptocurrencies Solve Problems
Since their conception, most of the products created on blockchain have sought to solve different problems: privacy, independence from third parties for the exchange of value, automatic trading with a Binance trading bot, or immutability of data. However, among these problems, the creation of new financial markets is not one of them.
The reason is that the cryptocurrency market adapts to the traditional market as we know it, but with a 2.0 version where what stands out is not what asset is invested in, but the technical efficiency behind it.
In this way, the value of a cryptocurrency is not limited to the trust of a government agency, but to the trust of a cryptographic system.
Governments themselves are studying the implementation of CBDCs, which is the digital version of the official currency created by central banks, and which would be built under the technological advantages associated with Blockchain.
A New Paradigm
Cryptocurrencies are helping to initiate an infrastructural change over the existing economic model, which will reduce operational costs, improve transparency and, in the long run, overall efficiency.
Just as we moved from calling from a landline to a cell phone, the monetary infrastructure also needs a paradigm shift that will make it more efficient.
This new paradigm is not intended to replace the bank's normal operations, but to be integrated in a phased manner at any point in its value chain.
Taking the above as a basis, we can conclude that the speculative markets that make up the crypto-driven economy are not a cause in themselves, but an effect derived from multiple factors.
The value of the associated technological solution itself, the marketing value of offering alternative investments in a traditional market, the generation of more liquid secondary markets, and a long etcetera.
These markets are the result of having created new solutions to existing problems. We observe how banking is evolving every day to a more technological stage, with the creation of virtual-only entities or with the provision of money in digital format.
This leads one to wonder to what extent banks will be willing to accept new currencies that allow faster and more secure transaction rates, digital identity solutions, or any new type of technology-based value concentration.
Identifying Value Propositions in a Growth Environment
On the other hand, the trust placed in these digital assets is moving to new emerging markets due to, among other factors, inflation, which closed in 2021 with a figure of over 6.5% in multiple countries - including New Zealand.
This also brings to mind the idea that when a security is created in any way, shape or form, there is also a speculator waiting to see how he can take advantage of it.
As there is a lot of information that may be illicit and for the retail investor who has just arrived, it is difficult to differentiate between which are the value propositions and which are not, it is always advisable to seek information and make sure that the platform with which you are going to operate has a legal backing behind it.
In conclusion, the key is to see and differentiate blockchain as a complete ecosystem in which the technology behind it is a logical evolution of traditional banking in line with the times, we live in.
It is not a matter of doing things radically different, but of applying improvements as has been done in other areas.
Being a young market, which still has a long way to grow, we will be watching to see how this evolution continues, which will depend to some extent on where the regulations go, whether or not they will allow innovation to bring more to the end-user or, on the contrary, they will opt for something more conservative.
Conclusion – The Solution to Make Efficient Trading
To say that cryptocurrencies are efficient is no lie. Over the years we have seen that it is a technological and financial revolution, which does not seem to have a final destination. It is, for this reason, we view cryptocurrencies as efficiency, not as a marketplace.
Many investors have realised this potential, which has also made the market for trading bots grow considerably.
These serve to automate trading, using reliable software that employs the strategy of the investors themselves. This is the pinnacle of efficiency in cryptocurrencies, and thanks to names like Binance, security is rarely compromised.
However, you should be careful before using a trading bot, as there are also many scams in the market. That is why we recommend only bots from respected companies like Binance, which can completely change the outcome of success and efficiency with cryptocurrencies.
The above references an opinion and is for informational purposes only. Do not take this as personalised financial advice or investment advice. The views expressed by the author do not necessarily represent the opinion of BitPrime.
Last updated: 21/04/2022