Crypto finance is important issue when we speak about crypto system as a whole. Of course crypto currency is a mean of payment that is why we need to focus on crypto finance sphere as a whole environment of crypto operations.
Crypto currencies are not issued by government or central banks — they are mined by computers. Crypto finance sphere started to develop not long ago. And simultaneously government started to look after it and tried to manipulate it. The latter probably due to a desire to concentrate state money creation tool at its disposal and prevent the formation of alternative means of payment which are not subjected to state regulation of crypto finance. Physically prohibit Internet transactions in crypto finance almost impossible, because in this case it requires access to every computer device, thus, it is prohibited by law in most countries as an interference with privacy. Restrictions may be made not in crypto finance but only in the exchange process of virtual currency for real money, forbidding such activity exchangers that today also takes place.
Crypto finance is not yet widespread, although the Internet field is used quite actively. It is hard for the whole country to operate at crypto finance daily activities, it is impossible to pay its goods or services. Only a several global online stores and businesses indicate on their websites that can accept cryptocurrency as a form of payment, thus, making them part of crypto finance mechanism.
Many Central Banks are interfering with crypto finance, Indicate that monetary issue currency Bitcoin has no legal obligations and provide for people, not controlled by the government of any country. Authorized banks have no legal grounds for the transfer of foreign currency from the sale bitcoin abroad and warns individuals and businesses from using that currency. The Central Banks are guided by the fact that the European banking management called EU banks refrain from transactions with cryptocurrency, including bitcoin until there is a system of rules that can prevent potential abuses in crypto finance.
Crypto finance is very interesting for IT-specialists who actively invest in crypto currency. Crypto finance advanced technologies as electronic cash, sooner or later come to every country in the world and become familiar way for settling the majority of citizens, we believe that the weakness of the modern financial market and the presence of many other problematic aspects of the socio-economic environment will lead lots of customers into crypto finance world market.
As a result, monetary instability of the system, which was the financial crisis of 2008-2009 lead more and more people to crypto finance. The idea of creating new currencies and popular term crypto finance which researchers interpreted as a digital payment system and money transfer mechanism based on the latest technologies that secure, anonymous, decentralized, and using stable virtual currency. The most common type is bitcoin today. It is also the most expensive among others: their value today is about 8.75 thousand US Dollars. Bitcoin crypto finance market capitalization is over 146.7 billion USD. The main advantages of this type of crypto finance is that there is no emission center, controls and restrictions, full anonymity, ability to generate currency yourself using Mining, protection against inflation, the lack of influence of environmental factors (other than market supply and demand) and others.
These are all benefits of crypto finance. However, despite all the benefits of diversity and distribution crypto finance their prospects rather ambiguous. Some countries regulate the crypto finance at the legislative level and stimulate its circulation, while others on the contrary — prohibit its use or make significant restrictions on the circulation of the crypto finance and currency.First, the cryptocurrency, compared with traditional forms of electronic money is a crypto finance cost denominated in the new currency unit rather than in the national currency, which acts as a legitimate means of payment. Second, the crypto finance cryptocurrency are not obligations of the credit institution, a specialized issuer or any other legal entity.
Despite some differences, the crypto finance have similarities with the national financial systems. The basis of the purchasing capacity of the cryptocurrency is still the same confidence value, which is the basis of the purchasing power of today’s national currencies. It is because of confidence in the national currency, but also because of their wide acceptance by business entities as a convenient means of exchange. The crypto finance manifests the nature of modern money — not the material, and not real, but absolutely conditional, based on recognition by all participants and the mutual settlement of obligations arising from economic activity. Also, raised the question of anonymity in crypto finance. As stated by government it is a huge problem. However, participants are not completely anonymous — all transactions relate to specific users who are identified by blockchain addresses. As is the case with email, anonymity is only possible if the user produces certain actions that do not allow to identify the account holder for blockchain address. Understanding this idea will help crypto finance to grow each year bigger and bigger.