CRYPTOCURRENCY
Cryptocurrency is a digital currency that is secured by cryptography, which is mainly designed for some important intentions such as:
> To functions as a medium of exchange.
> To exchange digital information.
> Uses cryptographic functions to secure the whole process.
Bitcoin, Ethereum, and Ripple are some examples of cryptocurrency.
Understanding Cryptocurrencies
Cryptocurrencies are the system that permits secure online payments which are label in terms of virtual tokens, which are illustrated by ledger entries internal to the system. The term Crypto refers to different encryption algorithms and cryptographic functions that secure these entries, such as economic curve encryption and hashing functions.
Types of Cryptocurrency
Bitcoin was the first blockchain-based cryptocurrency and the most popular and valuable cryptocurrency till now. Today there are thousands of cryptocurrencies are found some of them are branches of Bitcoin, and others are new cryptocurrencies that are created from scratch.
The world's largest cryptocurrency is Known as Bitcoin which is created in January 2009. It follows the ideas set by the esoteric and pseudonymous Satoshi Nakamoto. The identity of the person who created Bitcoin is still a mystery. Bitcoin is operated by a decentralized authority and it offers a lower transactional fee than the other traditional online payment systems.
Some other competitive cryptocurrencies which are produced by the success of bitcoin are known as Altcoins that includes Litecoin, Peercoin, and Namecoin, as well as Ethereum. Today the total value of crypto
currencies in the world is about $214billion.Bitcoin represents 68% of the total value.
Advantages and Disadvantages of Cryptocurrency
Advantages and disadvantages of cryptocurrency
Here are some advantages of Cryptocurrency.
Transactions:
In conventional business trades, agents, brokers, and legal representatives can add some essential complications and expense to what should otherwise a simple straightforward transactions. There should be paperwork, brokerage fee, commission, and many other special terms that may apply.
One of the most important advantage of cryptocurrency is transaction is that they are one to one dealing, taking place on peer to peer networking system that makes a standard practice (by cutting the middle man). This leads to greater purity in establishing audit trails, greater accountability, and less confusion about who should pay for what to whom, in this, the two parties involved in transactions each know who they are.
Strong Security:
Strong security is one of the most important factor in Cryptocurrency. Cryptocurrency got its name because it uses encryption techniques to verify a transaction. This means advance coding is included in storing and transferring cryptocurrency between wallets and to the public ledger. The purpose of encryption is to provide safety and security. One important factor to be considered is that if once a cryptocurrency transaction is confirmed, it cannot be reversed.
Easier International Trade:
One of the biggest challenge while entering international trade is having to deal with various currencies. Different currencies with different exchange rates caused more complications in process of buying and selling across borders. But cryptocurrency completely resolves this issue because it gives everyone in the world a single currency (BitCoin) to trade with. For example, a small artisan leather maker in China can sell his products to leather distribution companies in America without having to worry about differences in currency and exchange rates. Though we can say that cryptocurrency makes international trade simpler and easier.
Peer-to-Peer Focus:
The payments system of cryptocurrencies is fully peer-to-peer which means that users have access to send or receive payments to or from anyone on the network without requiring permission or confirmation from any external authority.
Accessibility:
Because users are able to send and receive cryptocurrency with only mobile or computer, cryptocurrencies are theoretically available to populations of users having no access to customary banking systems, credit cards, and other methods of payment.
Now it's time to take a look at some drawbacks or disadvantages of cryptocurrencies. so here are some disadvantages of cryptocurrencies.
Cryptocurrency is Difficult to Understand:
Cryptocurrency is a digital currency that is established on blockchain technology. This technology was established into practice on a large scale just a few years back. Experts in cryptocurrency and blockchain are very small in numbers and counted on fingers, and these technologies are still head towards development. To expert in cryptocurrency and blockchain, you need to learn about a lot of tweaks and curves of bends. Without knowing in detail about cryptocurrency it is very insecure to deal with it.
Cryptocurrency is Volatile:
Cryptocurrency is volatile since the beginning. One of the major causes of volatility in the crypto market is speculation. The investors betting that the price of various cryptocurrencies goes up and down by buying and selling them. Cryptocurrency values are totally dependent on the demand and supply of the currency. It is very risky to invest in cryptocurrency without understanding its risk factors.
Due to the volatile crypto market, a group of people still not sure about digital currency. An increase in the adoption of cryptocurrency may increase people's confidence and reduces the volatility in the crypto market.
Cryptocurrency Storage Security:
Cryptocurrency is not physical money it is digital money that is unable to touch. And there are many issues in storing cryptocurrency. Different types of cryptocurrency storage are available, one of them is a digital wallet. If you forget the password of your crypto wallet it is impossible to recover the data due to the strict security of the blockchain. which can be devasting for users.
Cryptocurrency Payment:
Wild fluctuations in the crypto market might intensify the investor's concern. In December 2017 the popular Bitcoin cryptocurrency for two weeks lost 25% of the total cost. These fluctuations make it difficult for the companies to accept cryptocurrency as payments for services and goods since the currency value significantly varies considerably depending on the hour.
Crypto Payment
Another problem to use crypto as a payment method is that is impossible to stop a transaction after it is completed. This irreversible method of payments can create a business problem that cannot be deal with it.
Conclusion:
Now it's time to consider the whole article once again.
Cryptocurrency is a digital currency that uses cryptography techniques and works as a medium of exchange. It uses cryptographic functions to secure the whole process. Secure online payments can be done by using cryptocurrency. Bitcoin is a famous cryptocurrency till now. Etherum,monero, Litecoin e.t.c are different types of cryptocurrency. Easy transactions, strong security, easier international trade, peer to peer focus, and high accessibility are the advantages of using cryptocurrency. Difficult to understand , Storage security and the Volatile nature of crypto are some drawbacks of using cryptocurrency.
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