A currency is a medium of exchange for goods and services. In the past, people used to exchange goods for other goods like fruits for vegetables, but in some cases, there will be complications where the value of one thing can’t compromise the value of another. That’s the reason currency came in, coins which are made up of valuable metals like gold and silver as everyone knows they will be worth something. So in the matter of trade if you don’t like the value of the exchange of the goods you can exchange by using coins. By the coins, you have assurance because it is a precious metal. That made a drastic convince in the trade. As moving forward banks became established, the government has control over the currency we realize that by carrying blocks of heavy precious metal people moved to more convenient ‘paper money’ it does the same thing in the trade as precious metal coins. It has value because the government says that it has value. It is proof given by the government that you own a certain amount of money. Moving a bit further we trade using cards 'plastic money' in this stage we don’t use physical money anymore, it’s just entries on a spreadsheet where banks just show the money debited or credited into accounts. This expanded introduction is to let you know where cryptocurrency strands. Many people think cryptocurrency is the most convenient era of exchange ever.
What is a Cryptocurrency?
Cryptocurrency is 100% virtual, where the logos only exist for the crypto there is no form to it as coins or paper money, it is the transfer of digital assets, a running spreadsheet of who pays what to who, But instead of multiple banks running separate records with the crypto, there is one enormous spreadsheet of every transaction made using a cryptocurrency called a ‘ledger’.
Why is Cryptocurrency?
DECENTRALIZATION
It’s decentralized which means every transaction is recorded in the same ledger, and there will be many copies of that ledger anyone who will be a part of that network will have one, where the bitcoin miners set up their computers to crunch through those transactions on their copy of this ledger. There are already about a million bitcoin miners around the world. Where bitcoin is just a type of cryptocurrency. For every transaction made by the miner, they will get some BTC as compensation. As a result of it, for every transaction made instead of checking a single bank record, with the help of this network method we can check every single ledger of the systems sharing network, after the completion of a transaction every single system connected to that network will update their records independently. By the advantage of the ledger, there will be no issue of hacking into accounts. If a hacker hacks into someone’s computer on the network trying to get the money by adjusting the figures and their copy of the ledger, they won't be going to get through, because the system will realize that 99.9% of the remaining ledgers are not updated. There’s a very clear organization to the system people see the future as open traceable transactions.
BLOCKCHAIN SYSTEM
Blockchain is a secured way of organizing the ledger that every system in the network contains. Every transaction is done by the cryptocurrency is going to be recorded as a block. Each block contains transaction data and a HASH (a unique identifier), and the hash of the previous block in the sequence. If there is a change in the block then the hash of the transaction will be changed but the hash of the previous transaction in the same block will remain the same, by this method it is impossible to hack or change the details of the block.
Which Cryptocurrency?
There are more than 4000 cryptocurrencies each of them has different properties like Bitcoin is the most used and invested, Ethereum is the second most invested cryptocurrency that can process transactions faster than BTC, Cardano which is technically superior to other, 'Lite coin' which contains a new algorithm, Dogecoin which is based on the same tech as the lite coin, but it is created as a joke of cryptocurrency. The values of these are going to be up and down frequently, which also introduced the dark side of it. The reason a lot of people don’t take cryptocurrency seriously is its volatility. They are new and no one knows the exact value of them, unlike gold or some precious metals. These princes are very speculative, the articles and some tweets of some famous people can change their volatility drastically. Many say that there will be more effective on the environment due to heavy mining of the cryptocurrency, the major downside of it is most of the companies are not sure about accepting the cryptocurrency.
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