Posted: Sep 15, 2017
Cryptocurrency can be defined as the virtual or digital currency, which uses cryptography as security. It is very hard to counterfeit a cryptocurrency because it has the security feature in place. The organic nature of cryptocurrency is what makes it more endearing and it is indeed the main defining feature it possesses. The cryptocurrency isn’t issued by the central authority and this makes it actually immune to any interference by the government or any kind of manipulation.
The cryptocurrency transactions are anonymous and this is what makes them so well suited for a lot of nefarious activities such as tax evasion and money laundering.
Where it started
The very first of its kind came in 2009 and it captured the public imagination to a great extent. After it was launched, more and more people have been drawn to it and today, millions of dollars have been raised. More and more cryptocurrencies have also emerged and are doing quite well in the market.
Drawbacks and benefits
The use of cryptocurrencies makes the transfer of funds between different people very easy when transactions are concerned. The transfers are well facilitated via the use of private and public keys for purposes of security. The transfers of funds are usually done with processing fees kept at a minimal and this helps the users to avoid all those steep fees that many banks and other financial institutions charge where wire transfers are concerned.
In the online stores, there is usually an online ledger that bears the different transactions that have been carried out so far. This is aimed at giving a great data structure which is exposed to the minimal hacker threat and it is easy to copy across various computers with the software installed. This kind of block chain has got some amazing uses of technologies like crowd funding and online voting. Many financial institutions see the potential that the cryptocurrencies have so as to lower the costs of transactions achieved by making the entire payment processing very efficient.
One thing worth noting is that cryptocurrencies are actually virtual in nature and they don’t come with a central repository. This means that this digital cryptocurrency can be completely wiped out if a computer were to crash, especially in circumstances where there is no backup copy of the holdings. The prices are usually determined by demand and supply and this means that the rate of exchange can fluctuate very easily and widely.
The same cryptocurrencies can also be hacked. So far, so many thefts have been reported and sometimes it has to do with millions of dollars. Regardless of the shortcomings, most people look at them as a great hope that it is possible for current to exist and preserve value. It also shows that exchange can be facilitated and currency can be very easy to transport regardless of whether there is influence from the governments or banks. It is for this reason that cryptocurrencies have gained so much popularity in the world today. They have actually been referred to as a global phenomenon.
Cryptocurrencies are without a doubt causing sizeable ripples in the financial world today. There isn’t a major bank, a prominent software company, a government or a major bank that hasn’t taken the time to find out more about the
Scott Reeds is a results-driven marketing expert who has helped national and start-up companies build their business. He is involved with Sphere Network to help launch their decentralized social network and their Initial Coin Offering.