What are Cryptocurrencies?
It’s no doubt that Cryptocurrency is changing the future of finance. But what are these cryptocurrencies and how are they created? Cryptocurriencies, is digital currency or a form of digital public money that are created by scrupulous mathematical calculation and monitored by millions of computer users called 'miners'. To be more precise, they are just lines of computer code that hold monetary value. These lines of code are created by electricity and high-performance computers.
Cryptography also controls the creation of new 'coins'. There are literally hundreds of coins now; only a handful of them have the potential to become a viable investment. Governments have no control over the creation of cryptocurrencies because of which they became popular. Most cryptocurrencies begin with a market cap in mind, which means that their production will decrease over time thus, making any particular coin more valuable in the future.
Like all cryptocurrencies, Bitcoin relies on a technology called blockchain. Instead of business taking place between banks, Cryptocurrency transactions take place directly between individuals. So, whenever a cryptocurrency transaction takes place, it is recorded on a digital ledger called a Blockchain.
The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.
Blockchain makes bitcoins transactions so secure that experts consider them to be virtually unhackable. And because the transactions are assured, the cost of verifying transactions is less than in a central bank though, admittedly, the cost of verifying bitcoin transactions has become fairly expensive. Every cryptocurrency has its own blockchain, and computers doing complex math in a large network maintain it.
Digital Gold – The Bitcoin – Will it be the Future Currency
Bitcoin was created to work outside national currencies. Many of us have already noticed the rise and popularity of bitcoin in countries like Zimbabwe and Venezuela. Bitcoin is used as a major means of exchange in these countries due to hyperinflation. More and more transactions are performed on cell phones in these regions, and so the value of bitcoin is more stable than the hyper-inflated national currency making bitcoin popular.
Will Our Future Be In Bitcoin?
However, others believe that bitcoin is too riddled with problems. It may not be used on a national scale as bitcoin supports limited transactions per minute. Bitcoin’s framework can only make seven transactions per second. However on the contrary, VISA’s credit card network can handle 65,000 transactions per second.
Another major issue is Privacy. Bitcoin is problematic as it is unable to offer privacy from cyber criminals and can give them a chance to penetrate a lot of issues like Ransomware or Silk Road
Next, Bitcoin value fluctuates a lot. Unlike other traditional currencies, which have a set value, the value of bitcoin is driven by speculation about its worth like a stock and hence it is not very good at the store of value.
At the end we can see that many countries are creeping closer to creating their own cryptocurrency. They will have to decide just how private they want transactions to be. Seeing the elevated switch to digital currencies, their societies, along with the governments themselves and the economies upon which all rely; will have to figure out how to adapt bitcoin. For more updates about Internet marketing, Enterprise Solutions, Cloud Computing Business Consulting Services, Enterprise Collaboration Services stay tuned with us...