Traditional money such as the Dollar, Euro, or Yen, all have something very unfortunate in common. These currencies are uncapped, centralized, and regulated. This means that these traditional currencies are regulated and controlled by a central establishment which can print as much of the currency as they see fit. In the United States, this establishment is the “Federal Reserve”, a private company which prints money and controls the supply of the dollar. The system as described above provides a few key weaknesses.
The first is that the currency is easily compromised via corruption within the centralizing agency. That is, if those who run the Federal Reserve are acting in their own interests, they can manipulate the dollar to disproportionately gain wealth and power. In addition, it leaves the dollar vulnerable to attack, since the Federal Reserve acts as a singular hub for the dollar, if that hub is compromised in any way, whether by a hostile attack or by internal corruption or strife as mentioned above, the dollar is compromised. Lastly, since the supply is theoretically infinite, it is very simple for the value of the dollar to plunge into near worthlessness due to inflation if those making the decisions within the Federal Reserve deem it proper to increase the money supply.
What makes this system worse, is very many actions that may be taken by such an establishment to mitigate present problems with economic trends, actually drive future harm to the economy and currency. For a specific example, if a country is heavily in debt, it helps to mitigate the value of the debt by decreasing the value of that country’s currency so that the debt is worth less. This, however, exacerbates problems in the future when this decrease in the value of the dollar forces the nation and its citizenry to take on untenable amounts of debt merely to continue surviving, requiring further devaluing of the currency, creating a vicious cycle that leads to what is called hyperinflation.
Vendors that deal in these digital currencies will benefit from many attributes of digital currencies that allow these vendors to avoid painful fallbacks of traditional money. Many of the benefits the vendors experience are passed directly onto the customer. When dealing in credit cards, vendors pay exorbitant fees and usually pass them onto the customer. With digital currencies, these fees are so small as to be completely negligible, and thus allow both the customer and vendor to save money. Further, transactions are perfectly secure, meaning that the consumer no longer need worry about their credit card information being stolen.
Customers can also enjoy the following perks of purchasing with digital currency: anonymous transactions, and easy international transactions. Firstly, unless a vendor specifically requests some kind of identification to pair with your wallet address, your wallet address is entirely anonymous. Further, there are anonymous alias systems being implemented that further allow for anonymity or disclosure of your own identity to be fully under your control. With these systems in place, you can allow for disclosure or require full anonymity at your discretion.
When it comes to international transactions, usually there are fantastically high fees for currency exchanging for traditional money, but digital currencies are global, and require no such exchanges. Do you want to buy something from a vendor or individual across the globe from you? All you have to worry about is shipping costs, but no longer will you need to deal with exorbitant fees with regard to your payments, nor ridiculous wait times, as even long distance transactions are nearly instant. Further, there need be no waiting until a certain hour for banks to open–which is especially difficult given time zone differences for international transactions– but instead one merely needs an internet connection to engage in an international transaction via Digital currencies.
Clearly, digital currencies are a step above traditional money when it comes to making shopping a faster and simpler experience, while also saving you money. Beyond these individualistic advantages, they also do away with the disease of centralization, and allow for a completely incorruptible system which is self-sustaining. The only question to ask is, why not?