A guest blog post from York-based design studio United by Design
A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. Created from code and built on cryptography, cryptocurrencies are secured and verified by maths, as opposed to by people or trust.
Using decentralised technology, cryptocurrencies allow users to make secure payments and store money without using their name or even having to go through a bank. All the transactions are then updated and held on a public ledger called blockchain.
Bitcoin is the first and most famous cryptocurrency. Described as a ‘peer-to-peer electronic cash system’, it serves as a digital standard within the cryptocurrency-industry and is now used as a global means of payment.
Since the 2007-8 recession, the finance market has become much more diverse. The breakdown of trust between traditional financial services and modern society has led to an emergence of newer, broader opportunities, known as alternative finance (‘alt fin’).
Now, with options such as, peer-to-peer platforms that bypass banks entirely, community share schemes that allow both direct investment and democratic influence of projects and crowdfunding finance to support local SME start-ups - this alternative finance movement is quickly becoming a major player in the financial sector.
Ultimately, these new methods provide us with a way of diverting our money away from the usual patterns of economic behaviour and create greater transparency. People now want to know exactly where their money is and what exactly it’s doing.
In continuing to assume that mainstream banks are still the safest places to invest, we could actually end up missing the opportunity to make our money work harder for us and our communities.
Written by Laura Harford (Copywriter at United by Design)