Cryptocurrency – The Future!
Just like digital currency have been making strides after demonetization, much to the fancy of the financial world, a new concept of cryptocurrency has been leading since few years. Since 90’s there have been several attempts to make digital coins. Then, in early 2009, an anonymous programmer or a group of programmers under an alias Satoshi Nakamoto introduced Bitcoin and it has made all the difference.
Let’s have a closer look at what cryptocurrency is and what does it hold for us in future.
What is Cryptocurrency?
A digital currency, used as a medium of exchange in which encryption is used to check and verify the number of units produced. It’s independent of central bank organization. It’s internet based and exhibits physical means. The name comes from ‘Cryptography’+’currency’.
How is Bitcoin-related to cryptocurrency?
Bitcoin is a cryptocurrency, in fact, it was released as open-source software making it first cryptocurrency created back in 2009. Today there more than 4,000 of cryptocurrencies coined altogether as ‘Altcoins’(Alternative coins).
How is Blockchain related to cryptocurrency?
The underlying technology or the concept used in cryptocurrency transaction, maintenance or verification is ‘Blockchain’. As mentioned cryptocurrency is a decentralized transaction, this decentralized control of each cryptocurrency works through distributed ledger technology, called as a Blockchain that serves as a public financial transaction database.
Cryptocurrencies are majorly used outside banking and governmental institutions and are exchanged over the Internet. No physical means is involved. While these alternatives, decentralized modes of exchange are in the early stages of development, they have the unique potential to challenge existing systems of currency and payments. As of April 23, 2018, total market capitalization of cryptocurrencies crosses 400 billion USD (*Wikipedia)
Cryptocurrencies surely sometimes would have brought a series of doubts in one’s mind. Concerns that such an unregulated global economy that cryptocurrencies offer may become a threat to society and can become tools for anonymous web criminals. Surely, cryptocurrency’s lack of regulation can make criminals evade taxes or use it for money laundering.
Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency. Strong cryptography and the magic of big numbers make it impossible to break this scheme. They are generated using a mechanism called mining, here when Blockchain comes making it very secure. Complex networks and algorithms involved in cryptocurrencies make them difficult to breach. Moreover, very powerful supercomputers are needed to do mining, making it nearly impossible for hackers when their return would be lossy. The only way to steal bitcoins is the same way as stealing money over the net, i.e by viruses or spam emails, etc.
Challenges for Cryptocurrency users?
Difficult transactions make it utterly important for users to be alert and cautious. It’s like having your entire money in your pockets. Once the amount is sanctioned, it can not be reversed.
- A digital medium used in exchanges
- Cryptographically secure
- Peer to peer
- Mutual distrust
Cryptocurrency is here to stay in the market and bring a revolution to the world. Almost every day new cryptocurrencies emerge, old ones die, early adopters get wealthy and some investors also lose money. Calling it a game of gambles can be shrewd.
It’s all up to you, to either be a part of the change or let the world pass by.