You might have heard the word Cryptocurrency. It might have rung numerous questions in your mind. What is Cryptocurrency? How does it Work? What do we do with it? What is the purpose of it? You are not the only one to do so.
Crypto Currency is not a recent thing, it has been active for more than a decade. It is only now that they are taking the mass attention by storm. Bitcoin, Ethereum are all cryptocurrencies, and not the only ones out there. There are many more, but the aforementioned the most popular.
What is Cryptocurrency?
Here we will be discussing what is Cryptocurrency? The blog post is dedicated to bringing you the knowledge and acquaintance to cryptocurrency. Between January 2015 and April 2016 the value of one coin cryptocurrency has risen over eleven times more. Now, this raises yet another question ie. How did one coin cryptocurrency achieve such a high value? One coin of one cryptocurrency is different from the other cryptocurrencies. One coin cryptocurrency is based on the cryptography (and also guarantees the security of it). Making it difficult to counterfeiting.
One coin is created through a process called Mining. Mining ensures that each and every mined coin is unique. Which is very likely to how every other dollar bill having its unique serial number, called the digital money or electronic cash.
Looking at the wider view, cryptocurrency can be used instead of paper money in the days to come.
One positive of Cryptocurrency is that it makes is much easier and reliable way to transfer the funds worldwide.
Basics to know:
In order to have a basic understanding of the cryptocurrency, there are a few basics you should acquaint yourself with. They are enlisted below:
- Public Ledgers
The transaction can be understood as the transfer of an amount of money (funds) from a digital wallet to another. Once the transaction is completed, it is submitted to the public ledger. Encrypted electronic signature is used by wallets in order to suffice the owners with a mathematical proof of transaction success.
Whenever a transaction is confirmed, it is submitted in the public ledgers, where it waits for confirmation. Cryptocurrency owner’s identity is encrypted as the system works on a cryptographic technique in order to ascertain the legitimacy of the records.
What is Mining? We have discussed this above. To make it easier for the human mind, mining is the confirmation of transactions. Well, mining is done by solving a complex computational problem. Once the transactions are done, they are added to the public ledger. And for that, you are required solving the problem we discussed. It is open source, making anybody able enough to confirm the transaction.
Benefits of Cryptocurrency:
Well to consider the hazards and mishaps, economically we are not so secure. Cryptocurrency provides us the desired safety we are looking for. Provides more than that if delve further into it. We are considering the benefits we will be provided with the advent of cryptocurrency as the digital currency.
- Counterfeited: As we have already discussed, cryptocurrencies cannot be counterfeited, and exist digitally. so there are no chances of economic fraud.
- Encrypted Identity: Comparing cryptocurrency to the credit cards, credit cards work on the principle of ‘pull’ (store initiate payment, pulling amount from accounts). Whereas, cryptocurrency works on the principle of “push” (empowering the holder of cryptocurrency to send whatever they want, with no excessive information).
- Open Source: Cryptocurrencies are for everyone, anybody can hold onto them, with having a digital wallet. Over 2 billion people have reliable access to the Internet, not owning access to exchange systems. M-PESA system in Kenya announced a bitcoin device, a courtesy that 1 in 3 Kenyans owns themselves their very own bitcoin wallets.
- You Own Your Account: Consider the case of PayPal, if they found any mishaps linked to your account or your account fishy, they have the power of freezing your assets on the spot. Cryptocurrency on other hands, you are the owner of your account, your key, your transfers. No one can take that away from you. Which is a massive positive about the cryptocurrency?
Though Cryptocurrency has its own flaws, this is something that predicts the economic trades of future. Cryptocurrency is not different from money transfer, but its direct funds transfer from your wallet to the receivers. Which is making it much quicker, reliable since it is encrypted. You don’t carry yet you have your currency in your digital wallets.
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