Cryptocurrencies are continually growing in popularity as more and more people continue to see the potentials in them. However, many more people still have fears and so, prefer the traditional cash savings. Just some months ago, I belonged to the latter category, and to me, that made more sense, and my money was safe!
Fast forward to this day, I have an entirely different opinion. I made my conclusion after being exposed to certain facts and that's what this article is about, to present facts about both sides and help readers make their own decision. So I invite you to read on.
Firstly, we have to acknowledge that the world of finance is getting increasingly digitized, with more than 90% of world money existing purely in digital form. With that in mind, a shift in perspective about digital currencies (and their acceptance) is already in motion.
Now, lets say you intend to save about $250 monthly, ordinarily, you'll simply want to put it in a savings account or in your regular bank account.
With a savings account, the bank promises to pay back your money with interest when you need it. And they have to earn that interest somehow. They do this by loaning your money out to others at much higher rates and earning a profit. What this means is that you actually fund their business and you only get peanuts in return.
Also, bear in mind that the buying power of your savings is going to get eaten away by inflation by about 1-3% per year. In simplified terms, this means that your $250 today will be worth less money in one year from now. And every time the government prints more paper money, the currency gets devalued.
However, crypto isn't affected by this as it has a fixed supply of coins, so it is more likely to hold value. In that sense, decentralization via blockchain is one of its most important characteristics, and it means that no single institution — like a central bank — can control the network.
Cryptocurrencies are just becoming as trustworthy as any national currency, you just have to take great care with operating your digital wallet. You can be your own bank and use a private wallet, but in many ways, this is similar to saving your cash in a sock.
You can store your funds for long periods of time and the growth of your account value would occur naturally as a result of supply and demand.
Interestingly, if you invested in crypto about a year ago, the value of your savings will certainly be higher today. However, same amount of investment lying in a savings account will hold less value.
But, note that it is certainly not advisable to convert all your savings into Cryptocurrencies. However, as people continue to accept these currencies, their credibility will grow, and the volatility should come down even further.