3 Ways Crypto Achieves Financial Freedom
|— The traditional financial system doesn’t allow you full financial control.|
— For security and ease of use, savings need to be entrusted to a bank for safekeeping, meaning they make profits on lending your savings – instead of you.
— Individuals need the approval to borrow or invest money, so their decisions are controlled by a central authority.
— Crypto is decentralized, which means there is no authority in charge of the system.
Financial freedom is one of the hallmarks of complete freedom – but you may not realize how many obstacles you’re facing. Here, let’s explain three key limitations on your financial control – and how crypto can overcome them.
Understanding Financial Freedom
When you think of financial freedom, what comes to mind? It’s usually described as a state where you simply don’t need to work anymore. You’ve got enough money coming in from elsewhere to live on for the foreseeable future.
But under this definition, somebody that has achieved “financial independence” is actually not as independent as they might think. After all, they’re still reliant on banks, governments, and a bunch of other middlemen to actually access and spend their own money — and often need to pay for the privilege too.
These intermediaries essentially provide a service that “financially independent” individuals are reliant on. These services can be revoked or come crashing down at any time — potentially leaving them in somewhat of a predicament. Instead, consider true financial freedom to be a position where you are in full control of your finances… completely unreliant on anyone or anything else.
Does this sound like your situation? Let’s explore it in a bit more depth below to see what financial freedom really looks like.
The 3 Elements of Financial Freedom
As previously touched on, the generally accepted definition of financial independence is a state of abundance and freedom from major financial decisions.
But this doesn’t say anything about the control individuals have over their finances. Whether they are free to access, use, and transfer their money as they please. What good is financial freedom, if they need to ask permission to use their own money?
Having true ownership of your funds is something that is often taken for granted.
Many people believe that funds held in a bank are completely safe and can be accessed and used however they please. Yet, this isn’t exactly true: withdrawal limits decide how much of your money you can access, transaction fees deter you from making certain types of transactions, opening hours prohibit certain services at certain times. Actually, there are a lot of things preventing you from having full control of your money.
That’s not to mention the biggest problem – where’s your interest?! When you deposit your money at a bank, the institution lends your savings to other entities for interest. Although you see only a very small return. Is it your money, or theirs? You earned it, you saved it – yet someone else takes the profits. Nowhere is the question of ownership more stark than in this context.
True ownership should mean full control. But how can you achieve that using a bank? Well, you can’t – but we have news for you. You don’t need a bank!
A Booming DeFi Market
Crypto means financial freedom because it offers you access to a booming DeFi (decentralized finance) market. A vast variety of traditional financial services that you can access directly, and without a bank.
So let’s return to that lending question. Let’s say you want to lend your crypto out. Firstly, this is your choice, nobody decides for you. Secondly, if and when you do lend your savings to someone, it’s you who gets the interest, not the bank.
You can also stake crypto to start earning rewards. Or even borrow crypto as you see fit. Using the blockchain for these sorts of services removed the need for a middleman. This, by the way, is thanks to blockchain smart contracts – a sort of self-executing computer program that lives on the blockchain.
The point is that ownership of your assets is a key feature of financial freedom. If you’re looking to achieve this, the possibilities offered by crypto and DeFi are the way to go.
Security and money go hand in hand.
When it comes to money, security generally means locking your funds away in a bank. We’ve already discussed how this impacts your freedom.
Security shouldn’t be a compromise. How our financial system is designed means that there are few alternatives to handing over your money to a trusted third party for secure and convenient safekeeping.
On the other hand, cryptocurrency removes the need for a bank. Your coins don’t actually live in your wallet. Instead they exist on an infrastructure called blockchain, a tamper-proof ledger system that has revolutionized how we store value. More importantly, this means that you can be your own bank.
Keeping your assets safe is a question of how you manage the private keys to your address on the blockchain. While this comes with its own unique set of vulnerabilities, you are the sole manager of your assets.
Ledger devices keep your private keys secure within the device at all times, the device offers the absolute highest level of protection for crypto assets.
Financial freedom means security without compromising your control; by allowing you to be your own bank, crypto and Ledger bring you one step closer to that goal.
Ease of Use
Lastly, what good is being financially free if actually accessing your money is fraught with obstacles? Actually, it’s not far from the status quo.
Say you want to make a large withdrawal from your bank: odds are you’ll face a gauntlet of questions before it’s approved. Want to spend your money abroad? Then you’re looking at spending limits, exchange fees, and potentially long delays — at the very least.
But what about crypto? Sure it doesn’t need a bank, but managing it does require access to the blockchain, which is a new and daunting process.
Real financial freedom means both security and ease of access. We couldn’t agree more, which is precisely why we created the Ledger hardware wallet. It allows you to manage your assets in complete security, while avoiding any third party involvement from banks or other entities. And the best part? By storing your private keys on a hardware device, it allows you to easily and safely access your coins and assets without the constant worry of exposing your critical information. In short, our mission is to unify ease of use with absolute security so that anyone can enjoy the incredible freedom of crypto.
Crypto Means Financial Freedom
The whole genesis of crypto was the quest for financial freedom. If you’re sick of tackling fees from every angle just to use or spend your own money with your bank, or struggling to pull your money out of that investment you’ve been stuck in all those years, then keep reading. The time has come to be your own bank – trust yourself.
So you’ve heard about the blockchain revolution and want to know what it means for you? Check out our School of Block episode explaining the concept in plain English!