Upon hearing of cryptocurrency, the first thing that crosses one’s mind is, “what is cryptocurrency?” Well, it is a mystery to many. in fact, very few people know about it, and among those few, there is still a huge percent that cannot explain what it actually is. Everyone talks about it as if they know all there is to know about it, but sadly they have little or no knowledge.
The simplest explanation is that it is digital money, designed to work in such a way that it is secure, confidential and anonymous in
most instances, hence leaving no paper trail whatsoever. It solely depends on the Internet, and applies the use of cryptography, which is defined as a process or way in which legible information gets converted into code that cannot be cracked.
Digital Currencies Run On Blockchain
It makes use of technology that is decentralized so that it is able to allow a variety of users to make money transactions that are secure, and also store money without having to use names, or better still without attracting the attention of financial institutions e.g. banks. They are run on a blockchain. The blockchain is described as a public ledger that is publicly distributed. Through this system, one can purchase, sell, invest and completely avoid leaving a trail for the government or banks to track the money trail.
Each day more and more people are diverting their attention to it and accepting this new currency. New businesses are slowly starting to accept it as a medium of exchange for goods or services rendered. Each day its popularity is increasing, and this is going to result to major changes in the financial sector.
Everything on this earth has both good and the bad implications. Unfortunately, this technological advancement in money transfer too has its negative implications. Because of the fact that it gives a great deal of anonymity, it is very likely to be used by criminals to facilitate their dealings without the risk of attracting the attention of the police.
It comes in several forms, the first one, and from which all the others have evolved from, is the Bitcoin. All of them are produced by meticulous alpha-numerical computations from a complex coding tool. The other currencies in this form are the Litecoin, Peercoin,Wordcoin and a few others, although none of the others has been able to even get as popular as the bitcoin. They have different prices and the prices are regulated by the supply of each currency, and the market demand for same
The advantages of this currency are numerous, but among the major ones is that it eliminates fraud. This is because it is a digital currency and cannot possibly be counterfeited or fraudulently reversed by the sender like is the case with credit card Charge backs. This makes it a darling to many.
It allows for immediate and on-the-spot settlement of payments. This too reduces fraud and unnecessary expenses. For example if you want to buy a car, normally you would seek the services of a lawyer, there would be signing of legal documents, and may take a lot of time, not forgetting the additional costs.
Another aspect that has really promoted the use of this currency is the fact that it is easily accessible. A huge percentage of people nowadays have access to the Internet, through either the use of hand held devices like phones, tablets and also computers, all those have access to the use this technology and money transactions are only a click away.
The low or sometimes zero transaction charges have also contributed highly to the fast rise of these currencies. There aren’t usually transaction fees for bitcoin exchanges because the network pays the miners. Even though there is no bitcoin transaction fee, a good number of users may involve third-party currency such as coinbase, and at the same time maintain their own bitcoin wallets. These services act the way Paypal does for cash or credit card users, providing the online exchange system for bitcoin, and as such, they are likely to charge fees. It is very interesting to note that Paypal does not accept or transfer bitcoins.
Everything has its pros and cons, and this currency is no exception. To be able to make a good decision, one has to be able to weigh out both sides thoroughly before settling for one. The technology is here, and it keeps advancing. Only time will tell how long it will take for the rest of the world to finally say yes.