Is Cryptocurrency Good For The Economy? What Is the Economic Impact of Cryptocurrency?
Any discussion encompassing cryptocurrency and economy requires taking into account a lot of factors to understand this relatively new yet highly significant technological development. Since the inception of Bitcoin in 2009, the economic impact of cryptocurrency has been both overt and subtle. Now over a decade later, cryptocurrency, the digital or virtual money that takes the form of tokens or coins, has established itself as a viable currency and form of investment, and the impact of cryptocurrency on society continues to grow.
As of 2024, the global cryptocurrency market has surged beyond $1.1 trillion, with millions of users worldwide integrating crypto into their daily lives. This growth signifies the ever-increasing role of digital currencies in shaping economic transactions. Cryptocurrency’s role in the economy has expanded in various sectors. As of 2020, more than 2,000 cryptocurrencies were in circulation, and around 36.5 million Americans owned some form of cryptocurrency. While cryptocurrency has yet to shake larger markets like traditional stocks, its popularity and acceptance show how much it has evolved as an investment vehicle. In 2017 alone, hundreds of billions of dollars flowed into cryptocurrency, reinforcing its comparison to “digital gold.” Much like precious metals, cryptocurrencies are valued for their potential to retain value, providing a hedge against inflation and economic instability.
However, cryptocurrency is still young, and its economic and social impact is expected to be a topic of discussion among economists and investors for years to come. So, is cryptocurrency good for the economy? Here are some of the ways cryptocurrency has made its mark on the global economic landscape.
Blockchain Technology and Its Impact on the Economy
At the heart of cryptocurrency is blockchain technology, which has slowly but surely entered mainstream business practices. The secure, decentralized nature of blockchain makes it ideal for various industries beyond finance, potentially unlocking billions of dollars in value. The proliferation of cryptocurrency has brought blockchain to public attention, and Bitcoin’s widespread use has helped introduce this technology to the masses. Here are some of the key sectors where blockchain is making an economic impact:
Financial Services: Blockchain technology has revolutionized cross-border transactions, making them faster, cheaper, and more transparent.
Messaging Apps: Some platforms now use blockchain technology for transactions and contracts, helping private investors.
Car Leasing and Sales: Blockchain can streamline the leasing process, providing secure and efficient management of contracts and payments.
Cloud Computing: Blockchain has enhanced security for cloud storage and smart contracts, significantly reducing the risk of hacking.
Government and Public Records: Blockchain offers a secure way to manage public records, reducing fraud, paperwork, and boosting accountability.
In 2024, industries such as supply chain management and healthcare have expanded their use of blockchain technology, allowing for enhanced traceability, reduced costs, and improved patient data management. These advancements are predicted to add billions to the global economy by 2030. As businesses discover more ways to incorporate blockchain into their operations, its economic benefits will likely expand, creating new revenue streams and operational efficiencies.
The Job Market: Cryptocurrency and Employment Growth
Cryptocurrency has created an entire industry around its exchange, management, and innovation. New businesses have emerged to facilitate cryptocurrency trading, exchanges, and security, creating thousands of jobs worldwide. Between 2016 and 2017, blockchain-related jobs grew from just over 1,000 to more than 4,000. Today, software engineers, blockchain developers, and cryptocurrency experts are in high demand as the industry continues to evolve.
In 2024, the blockchain and cryptocurrency job market has expanded significantly, with roles like blockchain developers, compliance officers, and DeFi (decentralized finance) specialists becoming increasingly important. According to LinkedIn’s annual Emerging Jobs Report, blockchain-related roles saw a 33% increase in demand in the past year alone. As cryptocurrency expands beyond Western economies and becomes legalized in more countries, it’s likely we will see even more job creation globally. From development to cybersecurity and beyond, the demand for talent in the cryptocurrency space will only increase.
Cryptocurrency as a Solution for Unstable Currencies
Cryptocurrency offers a valuable alternative for countries with unstable or hyperinflated currencies. Since the 1970s, confidence in U.S. banks has consistently decreased. And in countries where domestic currency fluctuations cause living conditions to plummet, cryptocurrency can serve as a lifeline. Cryptocurrency was designed to allow for peer-to-peer transactions without needing government oversight, making it highly utilitarian in these environments. There is a lot of potential for cryptocurrency to significantly impact society in regions with unstable financial systems.
Currently, countries facing severe inflation, such as Venezuela and Lebanon, have seen increased use of Bitcoin and stablecoins as an alternative store of value. Stablecoins, which are tied to stable assets like the U.S. dollar, have particularly gained traction, helping people protect their savings from inflationary pressures. According to the World Economic Forum, 1.7 billion people worldwide still don’t have a bank account. However, a large number of this population owns a mobile phone. Because cryptocurrencies can be transacted through mobile applications, cryptocurrency has become a viable option for unbanked populations.
An added advantage of cryptocurrency is its decentralized nature, allowing citizens of countries with volatile currencies to trade freely across borders. This creates a level of economic equality that was previously unattainable for many.
Cryptocurrency Lowers Transaction Costs and Increases Accessibility
Aside from Bitcoin in its current state, transaction costs for most cryptocurrency users are minimal to none. Cryptocurrencies and blockchain technology are decentralized, meaning there’s no need for the infrastructure required by traditional banks, such as branches, staff, or physical assets. This allows cryptocurrency to operate with lower fees, making it more cost-effective for global transactions.
In 2024, the average Bitcoin transaction fee remains at about $4, making it a highly competitive option for international remittances and cross-border payments compared to traditional methods like wire transfers, which can cost anywhere from $30 to $50 per transaction. The lower costs associated with cryptocurrency encourage more people to engage in financial activities they might otherwise avoid due to high fees, contributing to a closer global economy.
Economic Impact of Cryptocurrency Through Transparency
Blockchain technology and cryptocurrency transactions are automated, digitized, and tracked on a ledger that can never be manipulated by people, companies, or governments. Not only does this bring power and freedom to the people, but it also diminishes the risk of fraud and corruption. You can’t exactly fool a system that cannot be changed. This of course does not mean that blockchain and cryptocurrency are completely free from any vulnerability to bad actors, but with the use of blockchain technology, crypto’s security methods have set it apart from the traditional banking system.
This is particularly beneficial in boosting access to financial services in traditionally underserved populations and parts of the world. The utilitarian structure of cryptocurrencies allows these people to invest and transact with a global economy, which can boost their own economy and quality of life.
Transparency and Security: How Cryptocurrency Builds Trust
Blockchain technology ensures that every cryptocurrency transaction is tracked, recorded, and automated on a ledger that cannot be altered. This transparency reduces the risk of fraud, corruption, and human error. The decentralized, secure nature of blockchain helps build trust in the financial system, especially in parts of the world where trust in traditional banking systems is low.
In 2024, new innovations in blockchain security, such as zero-knowledge proofs and decentralized identity solutions, are further strengthening the transparency and security of crypto transactions, making it even harder for fraud or manipulation to occur. While blockchain technology and cryptocurrency are not entirely immune to vulnerabilities, their inherent design makes them significantly more secure than many traditional financial systems.
Reaching the Unbanked Population
As mentioned earlier, approximately 1.7 billion people globally lack access to traditional banking. Cryptocurrencies, especially when accessed through platforms like Pelicoin Bitcoin ATMs, offer these populations an opportunity to participate in the global economy. Since cryptocurrency requires less documentation and lower startup costs than traditional financial services, it provides a solution for households excluded from economic participation.
Efforts by organizations such as the Stellar Foundation and World Bank are advancing the use of blockchain for financial inclusion. Through partnerships with local governments and NGOs, these initiatives are working to provide unbanked populations with digital wallets and blockchain-based banking services, helping lift millions out of poverty.
The Impact of Cryptocurrency on Entrepreneurs
With its decentralized format, cryptocurrency allows entrepreneurs to engage in cross-border transactions without worrying about exchange rates or regulatory barriers. This has a profound impact on entrepreneurs, especially in developing regions, where traditional banking services are limited or costly. Entrepreneurs can now access a global customer base and receive payments in a secure, borderless format.
Small business owners are increasingly adopting cryptocurrency as a payment method, with platforms like BitPay and CoinGate making it easy for merchants to accept digital currencies. This allows businesses to access a global audience while avoiding high credit card fees and processing times.
The Impact of Cryptocurrency on Small Businesses
Small businesses are the backbone of many economies, and cryptocurrency can offer them several advantages. One of the most significant benefits is the low transaction fees associated with accepting cryptocurrency. Unlike traditional credit card payments, which can carry processing fees up to 3%, cryptocurrency transactions typically incur far lower costs, making it an attractive option for small businesses.
In 2024, a growing number of small businesses are accepting cryptocurrencies, particularly as younger generations prefer digital currencies for payments. This demographic shift is driving demand for businesses to adopt innovative payment methods and stay ahead of the competition. Crypto’s fast and efficient transactions allow businesses to process payments almost instantly, compared to the delays associated with traditional banking systems.
Another advantage is that cryptocurrency opens small businesses to a global customer base. As an international currency, crypto allows companies to reach broader audiences and avoid the complexities of currency conversions. This flexibility positions small businesses to thrive in an increasingly globalized market.
Investing in Cryptocurrency with Pelicoin Bitcoin ATMs
The overall positive economic potential of cryptocurrency shows that converting your cash into cryptocurrency can be a beneficial decision for both you and society as a whole over time. Worldwide, the total number of Bitcoin ATMs has skyrocketed, surpassing 40,000 in 2024. These machines are located in over 100 countries, with the U.S. accounting for more than half of them.
In the Gulf South, Pelicoin offers the largest and safest cryptocurrency ATM network. By starting with as little as $20, you can choose and manage your Bitcoin, Litecoin, and Ethereum assets by visiting one of our machines. Our many convenient ATM locations make it easy for everyone—from beginners to seasoned crypto enthusiasts—to convert their cash into cryptocurrency, without the hassle (and sometimes delays) of using an exchange directly.
Our website has helpful advice about where to find one of our ATMs and guidance about how to use them, so you can get started with this simple way to buy crypto right away. For news and discussion about topics such as cryptocurrency and the economy, visit our blog. If you still have questions, you can talk to us today by emailing support@pelicoin.com or calling 855-PELICOIN. We look forward to assisting you on your journey into the world of cryptocurrency!