Created in 2008, in the wake of the financial crisis, Cryptocurrency is a digital currency utilising cryptography for security measures where public and private keys transfer cryptocurrency between individuals. During the economic crisis, people became very upset at banks and governments after losing the trust of citizens and society.
Banks and governments, for things completely outside of their control, were perceived to have lost their hard-earned money.
For cryptocurrencies, a peer-to-peer model provides the exchange of currencies that are not created by a central banking system and also are not traded through a physical exchange. Instead, it’s a virtual transaction where their transfer between parties is purely electronic. In this way, it’s possible to move currencies from accounts with no need to require any financial institutions. The most common types of money currencies are:
- Bitcoin (BTC): Created in 2009, Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, also known as “miners,” are motivated by rewards (the release of new bitcoin) and transaction fees paid in Bitcoin. These miners can be thought of as the decentralised authority enforcing the credibility of the Bitcoin network.
- Litecoin (LTC): Launched in 2011, it was among the initial cryptocurrencies following Bitcoin, and was often referred to as ‘the silver to Bitcoin’s gold.’
- Ethereum (ETH): Launched in 2015, Ethereum is a decentralised software platform that enables Smart Contracts and Distributed Applications to be built and run without any downtime, fraud, control or interference from a third party.
- Zcash (ZEC): Zcash, a decentralised and open-source cryptocurrency launched in the latter part of 2016.
Cryptocurrency transactions are anonymous, untraceable and have created a niche for illegal transactions, like drug trafficking. As a result of the currency having no central repository, law enforcement and payment processors have no jurisdiction over Bitcoin accounts. For cryptocurrency supporters, this anonymity is a primary strength of this technology, despite the potential for illegal abuse, as it enables a shift in power from institutions to individuals. In addition, Crypto currency use has many advantages such as:
- Decentralisation: The first advantage of using crypto currencies is no control by any authority or government. It is a network of computers that manage the records and databases using Block chain technology.
- Global access: You could use your crypto money anywhere and everywhere, all over the globe. It’s easy to use with a strong potential.
- Cost of transaction: Transaction fees involved in crypto currency are much smaller when compared to the current traditional methods.
- No theft of identity: This is one major advantage of crypto currency over credit cards. Paying with crypto currencies keeps your anonymity safe and nobody could share your identity or replicate your transaction elsewhere.
- No user levels, everyone under a single roof: Crypto currencies do not make a difference between a money holder and other user who has the same level.
Many enterprises sell a lot of digital content for cryptocurrencies. Others offer a discount to customers who pay with. The cryptomoney market is promising, with many benefits for the users and we’re seeing businesses and users of money currencies increase.
So, how many crypto currencies do you have in your pocket?
Loubna, Consultant, Leyton France
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