Since the beginning of time, Humankind has always looked for options to explore and expand their wealth. We started with the barter system and now we are living in a world of digitalized money. We have always wanted to grow and understand the working of the technology in various ways possible. Here we are in an era of machines where everything can just be handled from the web. Let’s have a look at one such currency to understand what is it actually worth.
Cryptocurrency is a medium of exchange, created and stored electronically in the blockchain, using encryption techniques to control the creation of monetary units and verily transfer of funds. The best example is BITCOIN.
Understanding blockchain isn’t that difficult once you understand the working diagram.
Now let’s actually talk about Bitcoin. Bitcoin was the first cryptocurrency created by Satoshi Nakamoto using blockchain and had been a significant player in the crypto market. The cryptocurrency, denoted by bitcoin or BTC, can be accepted as payment for goods and services or bought either from other people or directly from exchanges/vending machines. These bitcoins can be transacted via software, apps, or various online platforms that provide wallets. Another way to obtain bitcoin is through mining. The Bitcoin system runs on a P2P network, and transactions happen directly between users with no intermediary. Bitcoin decentralizes the responsibilities of verifying the validity of transactions to the entire network.
How does this currency come into your hand? As specified above, It can be earned after transfers, but there is another way. Transactions you make are recorded in the public ledger called blockchain and are verified by network nodes, which could be any individual using a computer system with Bitcoin software installed. Once you have made a transfer, the transaction will be broadcast between various people and confirmed by the network. Upon verification, it will be recorded in the blockchain, and then the transfer is completed. This record-keeping process is referred to as mining, and people offering the computing power to do so are called miners. Bitcoins are created as an incentive for solving the cryptography puzzle using transaction data; thus, successful miners are rewarded with the newly created bitcoins, on top of transaction fees. So if you know about computing and able to solve a few puzzles, you will be able to earn a few bitcoins and make some money. This is very similar to working hard in a gold mine, but at the end of the day, you get the money, not the mine owners.
As everything in this world has pros and cons, let’s find out what are for these types of currencies.
1. It is transparent: It is an open ledger on which all transactions are recorded and monitored. Hence, Transactions are available for verification by anyone, anytime.
2. Portability: Unlike heavy bags full of money. You can carry billions on just a single device with you.
3. Independent: Since you are in control in of transactions without a third party involved, this helps to keep it safe. This protects you from identity theft.
1. Understanding: This currency is based on computer understanding, and a lot of people find it hard to understand technology hence it would be hard for them to trust such a tech.
2. Gone if lost: We live in a world which is connected to web and money like this easy catch for some hacker who knows you and has a deep understanding of blockchains. Hence, Once lost they can’t be recovered in case of security issue. Always keep your money away from the web.
There is one point which has been bothering me. You decide if it’s good or bad.
Transactions can’t be traced: So, there is no fear of anyone tracing the money through any organization. Hence, you can buy anything you want without being traced, and this is a boon for countries under a dictator’s rule. But it also makes a perfect tool for criminal transactions. A drug dealer could have someone dealing with a tremendous amount of money without being caught.
All the facts have been laid down. The decision is yours to make now.
Is it a myth or a possibility for the future?