Different kinds of cryptocurrency. (Image courtesy of Max Pixel)
Many people are going crazy about cryptocurrencies and why not? There are a lot of benefits that one can get, especially, businessmen from investing in these virtual currencies. There are also a lot of things that you can do with the coins of the future.
What is cryptocurrency?
A cryptocurrency is a virtual or digital currency and is used as a form of payment utilizing cryptography. The etymology came from the Greek words kryptos which means “hidden” and graphein which means “write”. In addition, it is also intended to regulate the establishment of new units of a specific cryptocurrency. Ideally, these virtual mediums of exchange are controlled entries in a data bank that cannot be modified except when particular circumstances are accomplished.
Brief History of Cryptocurrency
In the 1990s, several efforts from different systems have been made to establish a virtual currency but with no success. These systems include Beenz, DigiCash, and Flooz which failed for several reasons like financial concerns, fraud, and misunderstandings between bosses and employees.
In early 2009, Satoshi Nakamoto (might be a person or group of persons) introduced the first cryptocurrency called Bitcoin. He described it in his white paper as a ‘‘peer-to-peer electronic cash system.’’ This kind of system is absolutely allocated to prevent servers from gaining authority for manipulation.
Commonly Used Cryptocurrencies
Bitcoin. It is the mother of cryptocurrencies and considered the new gold. Transactions made with this digital currency involve no banks. In 2017, the price of it escalated to the thousands.
Bitcoin Cash. It is divergent from Bitcoin backed by the largest Bitcoin mining company as well as the maker of ASICs Bitcoin mining chips. Just a few months after its introduction, it ascended as one of the top five cryptocurrencies when it comes to market cap.
Ethereum. It is a decentralized program that operates applications accordingly with the exclusion of censorship, downtime, third-party intervention, and fraud. This programmable virtual currency allows developers to establish various distributed apps as well as technologies that will not function with Bitcoin.
Ripple. This digital mode of exchange does not utilize Blockchain just to connect with a network-wide agreement for dealings.
Advantages of Cryptocurrencies
You can buy goods. A large number of merchants both online and offline stores (such as Overstock and Newegg) accept Bitcoin as a mode of payment for their goods. It can also be used to pay for booked flights and hotels and or a college degree.
You can invest. Among cryptocurrencies, Bitcoin is the most distinguishable, and many people are investing in it. In fact, a BTC was valued at $7,000 in November 2017. Second to it is Ethereum with a value that soared at least 2,700 percent since May 2016.
You can use it as a mode of payment. With the advent in technology, some companies pay their employees with cryptocurrencies.
Skepticism cannot be avoided when it comes to cryptocurrencies. However, there are a lot of proofs that this kind of digital currency paves the way for a lot of people. As a matter of fact, Square (digital payments company) is expanding its function to purchase and market Bitcoin to a greater number of its Cash App users. The company likewise launched an exclusive webpage disclosing bitcoin and the mechanisms of its fundamental technology.