If there’s one thing crypto is known for, it’s the wild price movements. For speculative traders, these provide plenty of excitement, and opportunities to make huge profits – and equally, enormous losses. But for those who view volatility as a bug, rather than a feature, you’ll need a way of parking funds in a currency that doesn’t give you the financial equivalent of a white-knuckle ride.
Blockchain is truly a remarkable technology. The ability to transfer value online on a peer-to-peer basis was something that seemed intuitively impossible – and that many experts claimed was impossible – until less than ten years ago. Blockchain’s innovation promises a vast wealth of applications, making our financial and political systems fairer, more transparent and more efficient.
So it’s a little frustrating that the first thing people notice about bitcoin is the price. Just as the 1980s were a remarkable decade that saw the launch of the Mir space station, the first heart transplant, the rise of the personal computer and the Fall of the Berlin Wall, but will forever be remembered primarily for bad hair and wild music, bitcoin’s hidden depths risk being forever obscured by its habit of embarking on mad bull sprees and epic bear markets.
For those who prefer their currencies to move like a steamroller rather than a roller-coaster, this represents a significant problem for adoption. The good news is, there are some great solutions.
There’s no question that cryptocurrencies offer huge advantages over traditional fiat currencies. Unfortunately, there’s also no doubt that fiat is quite popular for good reasons. There’s no such thing as the perfect currency, but in an ideal world the circle that needs squaring is a form of money that:
- Can be transferred instantly
- Is borderless
- Has low transfer fees
- Doesn’t fluctuate wildly in value
- Doesn’t lose value over time, or can even be held as an investment
Banks are typically very bad at the first three, especially when you’re moving money around the world. If you regularly receive money from abroad, you’ll know what it’s like to get hit by mysterious fees and currency exchange rates that don’t bear much resemblance to the ‘official’ market rates. Cryptocurrencies, meanwhile, are an outstanding way to transfer value quickly and at low cost around the world. Fees are typically just cents to send any amount – even millions of dollars. Transactions register almost instantly and the funds can generally be spent within a few minutes (up to an hour in the case of bitcoin).
On the other hand, cryptocurrencies aren’t great when it comes to the fourth point, as anyone who watched bitcoin’s slide from $20,000 down to $6,000 will know. Cryptos can rocket in value, but they can plummet too. Currencies like pounds and euros fluctuate against the dollar but are far more stable. Analysts tend to raise eyebrows at anything more than 1% movements – which is just background noise for crypto.
The fifth one is a bit of a wildcard, and where you come out on it depends on how you understand the phrase ‘over time’. Traditional currencies are inflationary: more and more dollars are created every year, with the effect of making them worth less and less in the long run. The dollar has lost over 99% of its value in the last hundred years. But that effect is fairly slow, and only makes a big difference on a longer timescale. Bitcoin, meanwhile, has increased in value from $0.01 in June 2010 to almost $20,000 at the end of 2017. That’s 200 million percent. Crypto is too new to know whether it will continue to increase in value over the long run, and if so how much, but the difference so far is stark.
Needless to say, this wish list is impossible for any single currency to deliver. However, Uphold offers a great package of solutions that have much the same effect.
The best of both worlds
Even the most die-hard of bitcoin fans tend to admit there’s something useful about fiat currencies. Even though the world is changing, in the short term there are advantages to holding a currency that shops actually accept, and that won’t implode in value overnight. But crypto is also very handy and is only going to get more popular.
Uphold enables you to use both, seamlessly switching between popular crypto and fiat currencies as you need to. The ‘Card’ system for different currencies makes it incredibly easy to keep track of what you hold, and the fact that reserves are regularly and transparently audited is a big plus for confidence. For anyone looking for a career in crypto, it’s a great way to bridge the gap between two worlds that don’t always sit easily with one another.
Let’s say you’re a digital nomad from the UK. In practice, it might look something like this:
- Complete job for a client in Russia. Accept agreed payment equivalent to $2,000 in bitcoin (0.26 BTC) to Uphold GBP card.
- BTC arrives overnight and is automatically converted at market rates to £1,500.
- Keep three-quarters of payment on GBP card (£1,150).
- Send remaining quarter ($500/£350) to bitcoin card (0.065 BTC) as a long-term investment.
- Complete job for a client in the U.S. Accept agreed to payment of $150 in LTC (Litecoin is a good option for smaller payments due to its speed and low transaction fees).
- A client sends 1.7 LTC directly to GBP card, automatically converting it to £115.
- Withdraw contents of GBP card (£1,265) to UK bank account.
Without Uphold, these steps become dramatically more complicated. You’ll need to maintain different wallets for bitcoin and Litecoin, and you’ll need to use exchanges to cash them out. You’ll need to wait while someone in a different timezone sends you money, and if there’s a delay before you get it and can send it to the exchange, it may be worth less than it was by the time you sell it.
All those delays entail frustration, wasted time and often lower pay. The good news is, they’re all completely avoidable!