What advantages do cryptocurrencies have over traditional currencies?
First of all, it must be said that not all cryptocurrencies have the same advantages. On the contrary, in theory, each should have its own purpose, possibly different from the others, otherwise in the long term it could risk being ignored by the market in favor of other similar but more competitive cryptocurrencies.
For example, Bitcoin in this is really a unique cryptocurrency, with advantages that make it really not replicable or surmountable. However, its advantages in any case do not allow it to always be better than all the others on any occasion.
Some cryptocurrencies, like USDT or LINK, have such specific uses that they can in no way be replaced by Bitcoin, so there are multiple cryptocurrencies. In fact, in this specific case, they are even tokens, and not cryptocurrencies in the strict sense, with very specific applications.
Of course, over 5,700 tokens and cryptocurrencies have been released today, and among them are many that compete with each other, and several that provide no real advantage.
However, an advantage that all real cryptocurrencies and all tokens issued on real crypto blockchain have in common is that they can be used with decentralized instruments.
In theory, only those that are based on decentralized networks, such as Bitcoin or Ethereum, with relative tokens, should be considered as true cryptocurrencies, therefore, this article will ignore those cryptocurrencies that are not really decentralized.
The advantages of decentralized cryptocurrencies
Basically, there are three advantages to being based on decentralized networks.
The first is that are not objectionable by anyone in any way. In other words, decentralized networks are for definitions without a single controller or operator, which can impose its own wishes on its users.
This means that, in the absence of a controller, everyone can use it freely, without restrictions or control.
An advantage like this is especially evident in stable currencies anchored to the US dollar, such as USDT, because they have the same value as the dollar and can be used as alternatives to the US fiat currency, but without the limitations that the use of the latter. inevitably implies.
For example, sending US dollars to Iran is not allowed, but there is no way to prevent USDT from being sent.
Or there are restrictions and controls on international transactions of significant amounts of dollars, whereas there are and cannot exist for DAI or other stable currencies based on decentralized blockchains.
A second advantage is that decentralized transaction logs are not trusted, which means you don't have to trust anyone to make sure everything is working properly.
This is also an advantage that goes beyond the simple use of cryptocurrencies as exchange currencies, since it can also be useful for storing practically immutable data, and with certain senders, on the blockchain.
The third advantage, which in some ways can also be considered a disadvantage, is that decentralized transaction logs are inevitably publicIn other words, all transactions, although anonymous, can be easily verified by anyone.
This makes it extremely safe and secure, for example, when the payment has been made, because if the payer is given a unique address to send tokens, it will always be possible for anyone to verify if the payment has been made, and if so when and for what quantity.
Another important advantage is that, since it is decentralized, the control and management of cryptocurrencies is solely and exclusively entrusted to a public computer code that, if desired, can never be modified.
In this way, users who are able to understand this code, which can be freely accessed by all, can examine it and, therefore, know exactly how it will behave. There is no arbitrariness, nor unexpected behavior, nor changes that can undermine its operation.
Of course, this code can always be changed, but on the one hand these changes are very difficult to make (Bitcoin, for example, has not changed in several years), and on the other hand, they would be publicly known anyway.
Basically, the true cryptocurrencies, that is, the decentralized ones, are free and transparent, unlike fiat currencies whose use is never completely free and whose actual operation is totally opaque.
Also, they don't need trust, because they are so transparent that anyone can go to verify their operation.