Though the concept was introduced a few years ago, there is a common doubt about the concept that arises in most of our minds is “What is cryptocurrency”? Cryptocurrency is a type of digital asset, which is a medium of exchange in different types of transactions using cryptography. This medium of exchange also helps in controlling the creation of additional currency units. Though cryptocurrency has been a hot topic around now, there has been a lot of talks and press releases about cryptocurrency, not many people and businesses are aware of this concept. It is important that more and more people become aware of the impact of cryptocurrency and its uses.
Bitcoin, an electronic coin, was the first cryptocurrency, which was introduced in the year 2009. Since then, several different cryptocurrencies have been coming up and are making their presence in the market. Bitcoin is a part of a decentralized and distributed digital cash system, which is measured using the digital ledger known as the blockchain transaction database. So, if questions such as “why use the cryptocurrencies” or “why use the bitcoin” or “is it useful and safe”, then go ahead to find the solution for the queries.
What is Blockchain?
Blockchain which was known as blockchain is a set of growing lists called blocks which are linked with the use of cryptography and are secured. Cryptography is a study or practice of techniques for securing conversation in the presence of third parties in the environment. To be precise, it is about constructing and analyzing the protocol which will help prevent third parties or the public from having access to this conversation. Each block has cryptographic hash and data of the previous transaction which is inherited and are resistant to modification of data.
How Does Cryptocurrency Work?
Cryptocurrency is a highly encrypted decentralized digital exchange, which uses cryptography and serves as a medium of exchange, the transactions of which are recorded in a digital ledger called blockchain. This process of tracking a cryptocurrency’s transactions in a blockchain is known as mining. Bitcoin is a completely self-contained form of digital currency, which does not need any bank to store or make transactions.
It is similar to physical coins, which have value and can be used while trading, such as purchasing services and goods online or as a form of growing investment. Bitcoin can be traded from one person’s wallet to another, which is stored on the mobile phone, computer, or somewhere in the cloud. Bitcoin is forgery-resistant and the process of creating a Bitcoin is so complex that it is almost impossible to manipulate the system.
The Future of Cryptocurrency
However, for most countries, the established financial system works much better. Government issued currency is more stable and accepted everywhere, which is not the case with cryptocurrencies. But that doesn’t mean there’s no future for cryptocurrencies.
They might just not be in the form that we see today. Central banks of governments around the world may decide to create their own respective cryptocurrencies with their own set of controls in place to regulate them.
Most experts agree that the future of money is digital. A solid technology is needed to ensure that digital transactions are secure. The blockchain technology that powers cryptocurrencies could very well become the standard technology adopted by central banks around the world for creating their respective digital currencies. This kind of future may not be so far away. Cryptocurrency if seen from an environmental point of view will help save a lot of paper which is used into making currency. It would be a great benefit to maintaining a balance in ecology.
Though with an increase in technology, there has been a lot of things which are affecting cryptocurrency. Hacking can be one of that thing. There may be some loopholes which may have remained unnoticed which can give access to hackers and the security can be compromised and can have access to sensitive data. Another problem can arise due to disrupts in the connection. They need a technology behind them to work which needs to be maintained regularly to ensure working properly. Let’s expect a revolution from cryptocurrency and hope to bring a better future in the payment sector!!!!