1.8 TRILLION DOLLARS!!!
That's the total market capitalization of the entire crypto industry.
Why this much value? Why this much traction?
You've heard of Bitcoin, Ethereum and many other cryptos. Do you know what they are and how they actually work?
Here's a sneak peek of what we'll cover in this thread:
• Pain Points in our traditional banking system
• The solution — Cryptocurrencies
• Performing a crypto transaction
• How to purchase your first cryptocurrency
• ...and many more.
So let's dive right in!!
💎Pain Points in our traditional banking system
Everyday, we carry out financial transactions; but our traditional banking system has a lot of drawbacks and pain points which is even more experienced during cross-border transactions.
These include:
• High Fees: Banks charge high fees to process different types of transactions.
•Slow transaction execution: Cross-border transactions could take many hours to days to be completed which is inconvenient.
•Inflation: Fiat currencies like the Naira & Dollar are printed in unprecedented amounts, rapidly increasing the supply relative to the demand, reducing the currency's value and as a result reducing consumers' purchasing power.
•Centralized Control: Owning a traditional bank account is like having a physical safe and giving a spare key to someone who can access your funds at any time. The bank can reject users' transactions, freeze/deactivate users' accounts, debit users' accounts without their consent and even require multiple personal information from users.
In an attempt to curb these situations, cryptocurrencies emerged.
💎The solution — Cryptocurrencies
Cryptocurrencies are basically digital/virtual currencies secured by cryptography and powered by blockchain technology. Cryptocurrencies take advantage of the awesome properties of blockchain technology to enhance financial transactions.
So how do cryptocurrencies solve the pain points listed earlier?
• Low fees: Most cryptocurrency transactions charge very low txn fees even for cross-border transactions.
• Fast transactions: Most cryptocurrency transactions are processed in seconds to minutes.
• Fixed Supply: Most cryptos like Bitcoin have a fixed supply, visible on the blockchain and as a result can't be manipulated to result in inflation.
• Decentralized Transactions: Cryptocurrency transactions are enabled without the need/approval of any third party/entity.
• 24/7 Availability: Unlike our traditional banking systems, cryptocurrencies are available to be used any day, any time.
• Cross-border transactions: Users can send funds or receive funds within minutes to/from anywhere in the world without any restrictions.
Also cryptocurrencies are a store of value. As the crypto industry gains more traction, individuals invest in cryptocurrencies for financial gains/profits.
Cryptocurrencies also power the whole Decentralized Finance landscape and is also used in GameFi (A strong web3 narrative)
All crypto transactions are powered by blockchain technology so they are safe, secure, transparent, don't require user's personal information and above all decentralized.
💎Performing a crypto transaction
Just like in your normal fiat transaction, you need these basic things to carry out a transaction—a sender, receiver, funds and fees paid by the sender.
Same for crypto transactions, as a sender, you need:
• a wallet (like a bank account in CeFi)
• the receiver's wallet address (like an account number in CeFi)
• funds in your wallet/account in cryptocurrencies
• txn fees in crypto (as paid also in CeFi)—the type and amount of fees to be paid depends on what chain you're using.
Using your crypto wallet, you can send cryptocurrencies in any amount or worth to anyone from/to anywhere in the world. The transaction will be approved and recorded transparently on the blockchain.
💎 How to purchase your first cryptocurrency
• Create an account on a centralized crypto exchange like Binance
• Complete your KYC verification—If required
• Then you can purchase your first crypto within the crypto exchange with your card/p2p services.
• Your crypto will be successfully deposited into your crypto exchange account and you can resume your crypto journey.
💎 Conclusion
The world is evolving and so is our financial system. Cryptocurrencies offer a better system to carry out financial operations in a more safe, secure, fast, transparent and decentralized manner.
Crypto is the future and the future is here.
The exciting thing about crypto isn't just purchasing it but using/transacting with it as this will help you fully understand how cryptocurrencies work.
