The insurance industry is built on providing elements of stability and certainty where there may be unseen problems or doubt.
In its simplest form, it involves planning for the future, whatever that might bring.
Occasionally, something comes along in the financial world that has the potential for a long-term impact and it’s always a good idea for us all to become familiar with it and begin to understand it.
Amongst the catalogue of changes to the world over the last five years or so, the development and rise of cryptocurrencies have often grabbed headlines in sensational and sometimes alarming ways. For every story of a huge investment jackpot there seems to be a matching story of shady deals on the internet’s darkest corners.
So, as ever, it’s important to start with the facts.
Back to Basics
Cryptocurrencies, sometimes referred to as virtual currencies, are digital forms of financial exchange for goods and services used by individuals and groups. The major difference between cryptocurrencies and traditional money systems is that they aren’t controlled by a recognised national government or established banks. It’s this fact that gives them a decentralised status, meaning that the supply and value of the currency is determined by the users and not by a central bank or regulatory authority.
As the name suggests, cryptocurrencies are built with security in mind and operate on platforms that require sophisticated coding and technology. These platforms keep a record of every transaction across huge networks that all work together to validate and verify them, making counterfeiting almost impossible. Essentially, there is a public record for all to see with every transaction traceable and transparent.
Pros, Cons, and People Power
Given the basic facts, it’s easy to see why some people view cryptocurrencies as a more democratised version for the future of money. Early adopters, particularly of the industry-leading Bitcoin currency, are understandably happy to advocate a wider use, with some even making extraordinary fortunes having been involved from the beginning.
However, it will be the public that decide as they make decisions with their own transactions and ultimately their own money. There is a general understanding that the first half of 2021 represented a more mature development of attitudes towards cryptocurrency. Many major global companies strengthened their investment in them, and countries began to look for a path towards regulation to make it simpler and safer for people to get involved.
In the End, It’s Up to Us
For all the technological development, the impressive digital platforms, and the sometimes-dizzying array of new cryptocurrencies available, there is still a very reassuring and fundamental human component to how this all works.
Every cryptocurrency requires a digital wallet that allows you to store, send, and receive money through transactions. In order to access this wallet, you are given a uniquely identifiable authentication key. This acts as a secret password that nobody else will ever have access to and cannot be reset or replaced. Losing this password inevitably means losing access to the wallet and everything in it.
It is your responsibility to keep it safe.
As Insurance brokers, it’s easy for us to see an interesting parallel here with our industry. It’s always the decisions, actions, and responsible planning of the individual that allows them to feel secure in the protection of their future.
And this can only be completed through partnerships with companies and services that they know they can trust.
To learn more about how TopQuote can help with responsible planning for your future, get in touch with our friendly team.