In today’s connected society, just about everything is in flux. From the ways doctors interact with their patients to the ways drivers interact with their vehicles, connectivity thanks to the IoT (Internet of Things) is changing the status quo. The digital age has changed how consumers and businesses expect to go about life and business, and this is even becoming true for currency. Digital currency or cryptocurrency may not yet be mainstream, but its popularity is growing as it gathers investors that believe it is the future of financial transactions.
Cryptocurrency, which can be defined as a financial tool that takes the form of long blocks of alphanumeric code, is an alternative currency to state-backed currencies like the U.S. dollar. Unlike traditional state-backed currencies, digital currencies are decentralized, they’re stored on a device or hard drive, they cross international borders, and they’re not subject to inflation. They’re also anonymous, which makes cryptocurrencies attractive to investors who are leery of government involvement in their financial affairs.
The latest research from LendEDU, www.lendedu.com, an organization that provides free financial resources, suggests awareness of and interest in cryptocurrencies is on the rise. In recent weeks, prices in cryptocurrency markets have soared, with the price of Bitcoin, https://bitcoin.org, which is considered the original form of cryptocurrency, rising above $8,000 in November. This is despite a security incident that affected Tether, https://tether.to, a startup that converts cash into digital currency. LendEDU says 78.6% of those polled in September had heard of Bitcoin, but its latest survey was designed to test the knowledge and sentiment of consumers about not only Bitcoin but also alternative cryptocurrencies such as Ethereum, www.ethereum.org, and Ripple, https://ripple.com.
According to the research, 31.6% of consumers polled had heard of Ethereum, the second largest cryptocurrency by market capitalization, according to LendEDU, and 18% said they plan to invest in it in the future. Just under a quarter of those surveyed (22.2%) had heard of Ripple, the third largest cryptocurrency by market capitalization, according to LendEDU, and 14.8% plan on investing in it. Younger Americans appear significantly more likely to have heard of these currencies and to express interest in investing in them.
LendEDU also asked respondents about ICO (Initial Coin Offerings), which it defines as an unregulated means by which funds are raised for a new cryptocurrency venture. An ICO campaign offers startups the ability to bypass the regulated capital-raising process typically required by more traditional funding sources, such as banks and venture capitalists. Nearly a quarter (24.9%) of respondents had heard of ICO and 15.1% say they plan on investing in a startup or venture via an ICO campaign.
These new and non-traditional tools for buying, selling, funding, and raising capital are both a product of today’s digital era and a driver of its growth. As consumers and businesses grow accustomed to digital processes that replace paper processes, from digital medical records to digital building plans and beyond, it’s not a stretch to believe they will also warm up to the idea of digital currencies. However, while awareness of cryptocurrencies is growing, digital currencies still have a ways to go before they can replace traditional currencies in the eyes of most.
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