Cryptocurrency; the future of money

4 min read

The news about cryptocurrency, way back in 2009 was perceived to be programmers affairs. The theory and technicality behind it did not grab attention from the public. However, things have changed and it’s no longer programmers affair. People are now trading this digital currency like a storm. In addition, the digital coin has taken a new dimension and its future seems formidable from the trading blocks.

image showing different types of cryptocurrency blockchain

According to a report by independent, it shows that digital currency has come back with exceptional performance. One of its leading listings, known as Bitcoin, has increase value more than 20 times. This margin is huge and significantly shows how the digital citizens are ready for the future digital currency. Well, this platform has a lot of freedom, there’s no central bank or state regulation.

The Future Cryptocurrency

Digital citizen welcomes its benefits

The cryptocurrency is beginning to get a nod from various prospects in the marketing field. According to a report by nature, the principle in which the platform work is secure and it’s hard to break the puzzle. The user identity is encrypted, one can make transaction anonymously and without incurring any transaction cost. Another thing is the middlemen. You don’t have to queue at the bank and fill lengthy forms.

Lastly, we have mining, where miners who win the blog gets rewarded. All these features seem to be the best destination for digital citizens, who prefers anything that goes online. So, it’s a matter of time before we see cryptocurrency surpassing fiat currency.

Various Industry players leaning towards bitcoin payment

We have seen Microsoft and other players in different industries adopting bitcoin payment. Known travel website, Expedia and Icelandic singer Bjork, have also followed suit by giving their clients the opportunity to pay using bitcoin currencies. Across the border, Japan retailers now accept payment through bitcoin currency after the passing of the new law. This trend will explode in the near future, given that, the leading tech giants are opening the avenues.

What is this Cryptocurrency?

For newbies, cryptocurrency is not hard money, with which one can purchase goods and service at the stores. However, from the current digital trends and the way new technology improves day and night, things might change how future money is influencing the digital citizens. So, what is this cryptocurrency? And how is it becoming the future of money?

According to independent , a cryptocurrency is a digital coin, that act as a medium of exchange by using cryptography for secure transactions. In this system, one can transfer money in digital form without the involvement of the third party. For those who use it, there is no transaction fee that we always witness at the regular banks.

In the above definition, we mentioned cryptography. Well, it seems bewildering for newfangled in the tech world. However, it serves as the pillar of cryptocurrency. It transforms all the transaction that occurs (cipher) and delivers it to the intended party (decipher) through secret coding.

This cryptography serves multiple tasks, but we have the three core purposes it fulfills in cryptocurrency. Firstly, it secures the diver’s transactions that take place within the network. Secondly, it performs tasks that controls the generation of the new currency unit. Lastly, it ensures smooth verification of the transfer of varied digital assets and tokens within its network.

How does cryptocurrency work?

The concept

This is now where the puzzle is and a lot of people have found themselves in the muddle, on how it happens. Well, one doesn’t need to burn the midnight oil to know how the currency trade. Getting the concept is the key. To begin with, let’s break it by saying that, it works just like the debit/credit card we normally use. Here, we find that there’s a system that issue currency to its registered users, record transactions, and calculates balances, electronically. Now, the big difference that comes out is that cryptocurrency uses an algorithm to keep ledgers and issue currency. The conventional method relies on central bank and government for ledger and currency issuing.

How it works

Here, the transaction takes place between peers from a software that is known as cryptocurrency wallets. This software wallet is used by the user creating the transaction to transfer balances from one account known as a public address to another. The first requirement that one will need to have for the transaction is a password, related to that account, also known as a private key. This transactions then pass through encryption before they are broadcasted to cryptocurrency network. Another thing is that they are queued so that they can be added to the public ledger.

Now, all the transaction that will take place are recorded in public ledger for verification, the process is known as mining. So, one needs to note that the transaction amounts are public. However, the person who sent transaction is encrypted. When users carries out the transaction, each of those transaction gives a unique set of keys. We find that in a day, many transactions are added to a ledger promptly. The miners then do the verification process and add the blocks of transactions continuously, thereby forming chains of transactions.

Where can you trade Cryptocurrency?

This digital currency medium has gained popularity in recent years. But, as it took the center stage to influence the future of money, do you know where you can trade cryptocurrency?. A few of the blockchain currencies includes;

1. Bitcoin

It’s one of the oldest currencies in the cryptoworld. The creator of cryptocurrency, Satoshi Nakamoto, curated bitcoin in 2009 to act as an open source software. It allows a limpid peer to peer transaction where all users can view the transaction. However, the owner has a private key to decrypt his own bitcoin.

2. Litecoin

This was designed as an alternative to bitcoin, in order to promote fast transaction. The coin limit is higher at 84 million compared to bitcoin which offer a limit of 21 million. The developers also did some changes with the algorithm in Litecoin, as it uses scrypt, as oppose to SHA-256 that bitcoin uses.

3. Ethereum

This open source platform is also using the blockchain technology. It’s basically following the footsteps of Bitcoin and Litecoin.

4. Ripple

This type of cryptocurrency was introduced in 2012. It allows users to exchange in any currency. The user can decide to use US dollar, gold or bitcoin.

Final Thought

Cryptocurrency has been with us for a decade now. The reception at the onset was not overwhelming, because majority didn’t grasp the concept. However, things are changing, where news like it becoming the future of a money doesn’t raise eyebrows. We have seen how the tide is shaping up with tech leading players accepting bitcoin payment. With fiat currency facing hiccups, such as transaction fee, control by banks and government. The digital citizens might revisit the future of money.

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