What You Need to Know About Cryptocurrency
Over the past few years, cryptocurrency has been a buzzing term across the internet and the traditional news. On Google alone, there are up to 1 billion results on everything related to cryptocurrency. Here’s a quick insight on what you need to know about cryptocurrency.
WHAT IS BLOCKCHAIN?
Cryptocurrency is a digital currency or money that doesn’t require paper bills or coins for private individuals or groups to carry around and conduct financial transactions. They are also referred as “alternative coins” or “alt coins” because most cryptocurrencies aren’t regulated by national constitutions. But these alternative coins can be exchanged for fiat currencies in online peer-to-peer marketplaces regardless of the regulation.
Cryptocurrencies use cryptographic protocols or cryptography which are complex code systems that encrypt sensitive data, to secure and confirm transactions. Verification through cryptography is an important concept in cryptocurrency because if a transaction is unconfirmed, they can be easily forged. On the other hand, if a transaction is confirmed, it becomes part of the blockchain’s record of historical transactions which cannot be amended. This makes cryptocurrency protected from potential security breach.
The idea of cryptocurrency existed in the early 1980s when cryptographers began exploring complex algorithms that allowed secure, unalterable information exchanges between parties which became the foundation of today’s electronic currency transfers. By the end of 1980s, a cryptographer named David Chaum founded DigiCash based on the algorithm. However, due to the non-decentralized nature of the cryptocurrency, new legislations imposed and poor business partnerships, DigiCash went out of business in 1990s.
Afterwards, a computer scientist and cryptographer, Nick Szabo, developed a cryptocurrency called Bit Gold which used blockchain technology to support the system. Although Bit Gold’s popularity never peaked up and eventually ceased, as a result of its blockchain technology, it inspired most of today’s existing and popular cryptocurrencies such as Bitcoin (BTC), Litecoin (LTC) and more.
Examples of cryptocurrency:
For a full list, you can visit https://coinmarketcap.com/
- Decentralization: Cryptocurrencies use blockchain technology to jointly manage the transaction data which is not controlled by one central constitution. Without an authoritative gate keeper, users do not have to ask or pay additional fee to anybody else to use their cryptocurrency.
- Accessibility: Due to decentralization, there are less restrictions against the user to have the rights and access to cryptocurrency. In some nations, banks do not permit people of certain race, gender or age to open an account. In addition, in areas where women do work, they find their earnings are controlled by their male spouses or families. As long as users have access to internet through a device, they are able to retain control over their finances.
- Identity Protection: Users do not have to share their personal information to conduct activities with their assets. Instead, they only need to share the address of their cryptocurrency wallet. This reduces the risk of people having access to and misuse personal details without the knowledge of the user.
- Universal Recognition: Cryptocurrency is not bounded by any nation which makes them not affected by the interest rates and transaction charges of any country. Thus, users would experience less friction in transferring cryptocurrencies at a global scale. Also, this reduces the amount of time for individuals or companies to transfer money across nations compared to going through banks.
WHAT CAN I DO WITH CRYPTOCURRENCY?
- Shop & Dine: Hundreds and thousands of merchants now accept cryptocurrency as a form of payment such as Microsoft, Shopify Stores, REEDS Jewelers Inc, Lamborghini, Expedia, Newegg, KFC Canada, Playboy, Subway and more.
- Travel: Since cryptocurrency is not bounded by a specific national government, travelling with crypto helps users to save costs on money exchanges and reduce risk of getting robbed from carrying cash around.
- Trade: The booming market of crypto opened doors to multiple ways for people to potentially expand value of their assets. If you own a cryptocurrency, head over to www.testnet.bitorb.com to begin your derivatives trading journey.