Whether you have prior knowledge of cryptocurrency, or you are just beginning to try your hand at buying and trading, there is no denying that this digital currency has contributed to the shift of online banking and other fintech technologies. As the implementation of blockchain continues across a number of industries and more investments are made to implement new and exciting technologies to streamline the business sector, it is the boom of cryptocurrency that contributed to the booming industry we see today. In this article, we will be looking into cryptocurrency as a whole as well as the impact that it has had on the Fintech industry up until the present day.
The Boom Of Cryptocurrency
2016 was a huge year for the fintech market as well as the Bitcoin and other cryptocurrencies as this style of currency began to revolutionise the finance sector as we know it. With a virtual currency allowing for cheap online payments without the need for multiple traditional channels. It was in the year of 2016 that the price of Bitcoin has jumped from around 572.33 to about 4,764.87 U.S Dollars in August of 2017. As the virtual currency began to gain popularity, this then increased the price of the virtual currency to approximately $9,225 US dollars.
This was highly beneficial for both businesses and individuals investing in this style of currency as many experienced a large amount of profit as a result.
The Benefits Of This To Business
As cryptocurrency began to increase in popularity, there were a number of benefits that could completely revolutionise the business sector as we know it. With virtual currencies only being affected by inflation and currency exchange rates to a certain extent, this allowed for businesses big and small to make payments quickly at a consistent going rate. Due To the decentralised nature of such online currency, the price of a cryptocurrency is determined by these ongoing factors:
- Supply and Demand
- Cost of the mining process
- Number of competing currencies
- Exchanges it trades on
- Internal governance
These factors make this highly beneficial to businesses as they can be tracked with ease, this, therefore, allows a business to buy and sell crypto without losing out on their investment in the long term.
Faster International Repayments
Another benefit to business when using online currencies such as this is the speed at which payments can be made. With each payment being sent within just a few minutes, you can transfer money from business to business without any additional fees. This is great for quick business transactions such as buying and purchasing goods as money can change hands securely. With a number of businesses such as Shopify and tech giant Microsoft now making the most of this online currency for customers, there are set to be a number of other businesses looking to adopt this style of currency in the near future.
Ability To Replicate Trading Patterns
In addition to the ability to make faster and more secure international payments, there is also the ability to replicate trading patterns using online trading platforms such as Etoro. These services not only allow you to closely monitor your own investments, but they allow for you to monitor the patterns of a number of markets all from your own home page. Since the birth of Etoro in September of 2007 the company have continued to completely revolutionize international trading forever. With their fintech technology allowing users to trade in financial assets in 2009 and evolving to include stocks in 2013 and cryptocurrency by 2017, the company have continued to evolve and provide new and exciting fintech technologies to the benefit of the user.
Increased Availability To Markets
Though competition is needed for a sector to thrive, cryptocurrency and the development of fintech technologies has led to an increase in the availability of markets. With fintech technologies such as online trading platforms, mobile banking and blockchain technology, investing in international marketplaces as well as navigating the finance industry is now easier than ever before. Though this is only in the early stages of implementation, the increased availability to a number of markets is enticing a number of industries to adopt some form of fintech technology.
More Secure Transfers
The final way that fintech has had to evolve due to cryptocurrency is through the more secure ways of trading. Whether this is the encryption of data with every payment or a secure wallet with an identification number, blockchain technology has had to evolve in order to up security protocol. In addition to its use in cryptocurrency, blockchain can also be implemented in a number of business sectors to ensure the security of personal information. Though this is only in the development stages at this time, 2020 could be the year that this style of technology helps to streamline a number of processes across multiple sectors.
How Has This Affected Fintech Technology?
Though traditional banking is still needed in a number of cases, fintech technology such as online banking applications and personal savings apps have helped to revolutionise the financial industry. Not only has it made payments faster, but it has also allowed for users to feel more in control of their finances as a result. But how has it affected behaviours outside of cryptocurrency?
With applications such as PayPal, Google Pay and Apple Pay seeing as much as a 30% increase year on year in transactions, this new way of paying is gaining popularity quickly. But how else has it affected other aspects of our lives? The increase in financial technology has also made lending and borrowing easier for businesses and individuals as a number of peer to peer lenders have created online applications for quick applications. This has benefitted the financial industry as there the availability of alternative finance such as this is now easier than ever.
The Future Of Fintech Technology
Though the future of fintech technology remains relatively unclear as we move into the new year, 202o is set to be a big year for the industry. Not only will we experience further movement in the crypto industry as new companies enter the market, but we are also set to see the link of Blockchain and the internet of things. In a report outlined by the International Data Corporation, there is said to be an increased interest in the convergence of the internet of things and blockchain I order to produce state of the art, secure solutions for a number of different sectors. Whether this is an extensive database for a business or increased efficiency with production companies, this convergence could be the next big technological breakthrough that we need.
With this in mind, there are a number of ways that fintech technology as well as the growing popularity of cryptocurrencies have helped a number of industries to expand. Whether this is through the integration of blockchain technology alongside intelligent Ai systems, or the continued use of online trading by individuals and businesses alike, only time will tell as to what is next for this growing industry in 2020.