Cryptocurrency: Is this the future or is it a scam
What is cryptocurrency
A cryptocurrency is a digital or virtual currency that uses cryptography for security.
Cryptography It is the practice and study of hiding information. It is the science used to try to keep information secret and safe. Cryptography is used in ATM (bank) cards, computer passwords, and online shopping.
If you want to go in-depth with Cryptography here is the link
In simplest Form, we can say that cryptography is a type of Encryption.
A cryptocurrency is difficult to counterfeit because of this security feature. The main advantage or for some it might be a disadvantage; it is not issued by any central authority, meaning that it cannot be controlled by the government.
History of Cryptocurrency
Cryptographic electronic money was first invented in 1983 by the American cryptographer David Chaum which he named ecash, But The first decentralized cryptocurrency, bitcoin, was created in 2009 by Satoshi Nakamoto. Then followed by Namecoin in April 2011, Litecoin in Oct 2011, Peercoin and Ethereum in 2015. Today there are hundreds of cryptocurrency often referred to as altcoin.
First decentralized cryptocurrency, bitcoin, was created in 2009 by Satoshi Nakamoto.
Now we talk about two big ones Bitcoin and Ethereum. So the Bitcoin is the most known, bought and hyped right now.Bitcoin has been around since 2009 and became popular in 2013, Ethereum has been around since 2015 and becoming more popular now and there is also a popular currency named Litecoin which is doing pretty well.
Robocoin, launched the first bitcoin ATM “is similar to bank ATMs” in the United States on February 20, 2014. By September 2017 1574 bitcoin ATMs were installed around the world with an average fee of 9.05%.
There is also a trending Cryptocurrency called Dogecoin. The history of Dogecoin is an interesting one; Introducing itself as a prank or joke it is now the sensastion for the traders’ community.
- Easier to transfer funds between two parties through the use of public and private keys for security purposes.
- There are very minimal processing fees, which are opposite to the bank transfer which is highly charged by financial institutions
- Proper Transaction history, an online ledger is created for the bitcoin payments.
- Very secure, Cryptocurrencies are not immune to the threat of hacking.
- No government interference, outside the influence of central banks and governments.
- If you lose your wallet password or someone gets it, you lose all your bitcoins or digital currency.
- It is being used by Hackers and other wrong entities for illegal purposes.
- it is opposed by central banking systems and governments.
- Their value is very much volatile.
- Anonymous, you never know who you might be dealing with.
How does the cryptocurrency transaction work
I will explain it to you in as simple language as possible.
The transaction between bitcoin is recorded in a ledger, it shows where the money is going and from whom.
Example: let us say, you and I want to exchange bitcoin. I have 20 bitcoins and you have 0 and I want to give 3 bitcoins to you now this is how its gonna work.
A has 20 bitcoins, B has 0
A sends 5 bitcoins to B
B now have 5 bitcoins and A has 15.
This will be shown in the ledger in a simple way.
Now, The ledger which keeps the record is called blockchain, if someone is talking about blockchain currency then he is referring to this system.
Do you know that there are 21 Million Bitcoins available and looking at current market 1 bitcoin’s value is around 2000$
Why we need Cryptocurrency
As a society, we are pretty tired of banks, we are fed up with transaction fees, penalties, demonetization, hidden fees and other charges. We don’t even have actual control over money example: if we want to take all our money out of the bank they won’t let you take it, if you want to send money to someone you cant do it without a bank.
Imagine how the world would be if we don’t depend on our banking system. We are free to trade, transfer and keep it without any charges and interference.
Digital currency has the power to make it happen. you can store money, transfer money without any government interference.
How can you buy it?
You can purchase Cryptocurrency either from the Internet stores, or directly from other people via marketplaces.
Once you’ve purchased these digital currencies, you can trade it online using a wallet or an online trading service.
Some places do have ATM’s for bitcoins which will help you in doing transactions. You can search for them in google.
Is this the future or is it a scam?
As for the future of cryptocurrency, it largely comes down to factor whether or not Central Banks and governments release their own versions and make them the only legal tender, or there be an endorsement of cryptocurrency by officials like bitcoin, Ethereum.
According to Warren Buffet “Bitcoin is exciting and better than currency for large transactions”.
And according to Eric Schmidt (Google Chairman) “creating something not duplicable in the digital world has an enormous value”.
So the conclusion is, it is a gamble, but it is certainly one to watch as it becomes better understood by the mainstream.
Take a look at this Youtube video which simplifies the Cryptocurrency