Cryptocurrency is a form of digital money that is designed to be secure. It is a currency that is associated with cryptography, the process of converting legible information into an almost uncrack-able code, to track the purchases and transfers.
The first cryptocurrency was bitcoin which was created in 2009 and is the best known. Other common cryptocurrencies are Ethereum, Ripple and Litecoin. The total market capitalization of cryptocurrencies continues to grow, recently surpassing $206 billion and hitting a new record.
Bitcoin mining is an increasingly popular occupation; verifying transactions and managing the public ledger is what differs bitcoin from normal cash i.e. no centralised system is recording or handling the monetary procedures rather it is processed by a group of volunteers who get Bitcoins for completing their tasks
Bitcoins can be used for all sorts of real transactions. First you buy bitcoins however you like, either through your credit card, a bank account or even anonymously with cash. Then your bitcoins are transferred directly into your Bitcoin account, and you can send and receive payments directly to a buyer or seller without the need for a typical go-between, such as a bank or credit card company. Value of these cryptocurrencies is determined firstly by the sheer demand of these cryptocurrencies and secondly by their ability to act as a medium by which goods or services are exchanged.
Cryptocurrencies enable economic freedom; many people today are unable to safely store wealth without it being stolen or confiscated. It will allow anyone to be in control of their own money. It is more volatile than the dollar or euro today, but its volatility has decreased every year now approaching the levels of some fiat currencies). In the coming years, it will be more stable than many of the 180+ fiat currencies in the world.
Another interesting turn of events is the acceptance of Bitcoin in the educational industry, with the University of Ohio hosting classes about Bitcoin and other cryptocurrencies as a part of its MFE curriculum. Several colleges have even begun to accept Bitcoin as a means of payment, a move which will clearly help bring this alternative currency to the mainstream. The acceptance of Bitcoin, in general, has already led to a few companies considering genuine investment opportunities in the currency, further fueling its journey to mainstream.
Bitcoin, in its most basic form, is a ledger containing the balances of all the people in the Bitcoin Network. Anonymity is ensured by the securing the users’ names with account numbers.
You could say cryptocurrencies are better than old style currencies and that their very nature makes them invulnerable but I feel the protection is in the pure efficiency of blockchain technologies and the giant economic advantages they will bring. But if there is one thing we know for sure, it is that the currency seems to have a wide appeal with a particular section of technology. Bitcoin or no, it’s a new dawn and you have to be in it for it’s going to be wild.