Cryptocurrency has been revolutionizing the world economy at a very fast speed.
Cryptocurrency has been revolutionizing the world economy at a very fast speed. The economy and trade are largely benefiting from cryptocurrency or digital currency. But what actually cryptocurrency is? Cryptocurrency can be broken in two words CRYPTO and CURRENCY. Currency is a well-known term. Crytpo is short of cryptography, which means exchanging with the help of certain codes. When these two words are put together we get a new kind of digitally coded currency. Hence also called digital currency. The first cryptocurrency is Bitcoin created in 2009. All the other cryptocurrencies together are called altcoins.
Above are some of the other digital currencies.
Currencies are under control of governments of the countries and they print the currencies. On the other hand, cryptocurrencies are fully decentralized.Cryptocurrencies are designed to decrease in production over time which creates a market cap over them.
History of Cryptocurrency
The first Cryptocurrency was Bitcoin created by Satoshi Nakamoto. Bitcoin uses SHA-256 which is a set of cryptographic hash functions designed by U.S national security agency. Namecoin, the first altcoin was created in 2011. It was created to make internet censorship more difficult. In October 2011, Litecoin was released and was the first cryptocurrency to use the script as its hash function rather than SHA-256.
Cryptocurrencies are maintained by miners who are members of general public and have set up their computers with mining software. Cryptocurrency let us take for example bitcoin, is stored by the public in digital wallets. All the transactions of Bitcoin holders are recorded in a public ledger called Blockchain. This ledger is visible to everyone involved in the process unlike the ledgers of banks which are not accessible to the public.
Advantages of Cryptocurrency
- Cryptocurrencies are coded hence cannot be counterfeited arbitrarily by the sender hence making a fraud impossible.
- Transactions using credit cards gives full access to our credit information to the merchants even if we have to make a small payment.Cryptocurrency allows the holder to send exactly what needs to be sent without giving access to further information.This protects the user from Identity theft.
- Cryptocurrency users do not need any third party approval to make their transaction settlements. This saves a lot of time since no third party is involved making immediate settlements possible.
- Anyone who has access to internet and phone can have access to cryptocurrency market. They need not have access to traditional exchange systems. This makes cryptocurrency easily accessible to everyone.
- There are either no or very low transaction fees for cryptocurrency users, unlike cash or credit cards.
- The transactions for Cryptocurrency are recorded on a public platform that is Blockchain which makes these transactions transparent.
- Currencies are under control of the governments and they print the currencies according to the demand.This causes inflation. The cryptocurrencies are controlled by no one hence are resistant to inflation.
Since the cryptocurrencies are not owned by any government nobody can decide when to shut it just like the internet.The individual who holds the cryptocurrency is the sole owner.
Cryptocurrency is presently a small market but is growing at a very fast rate and has a very promising future.
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