A company by the name of cryptocurrency spearheaded what is called the movement of cryptocurrencies, something that has taken the financial world by storm. However, to my disdain, most of the articles that you will read in the mainstream media look at this new financial instrument in a very negative way, presenting many biases and falsities that take away from the effectiveness of what it actually does.
The Basics of Cryptocurrency
When you hear the term cryptocurrencies, this is actually a term that is used to describe all different types of digital mediums of exchange, an umbrella term that represents the security and framework of this form of cryptocurrency. Specifically, cryptocurrencies are representative of a technology that is protected, making it impossible for the supply of money to go beyond an algorithmic rate that is predetermined and known publicly. Similar to precious metals, the equivalent would be the cryptocurrency algorithm that is going to have limits, which means this form of digital tokens could never be mined because it has limitations.
This is a cloud-based form of currency, meaning that it only has virtual or digital tokens. When the first cryptocurrency was developed, it was called Bitcoin. Bitcoin, when people are interacting with this digital currency, or simply participating within the Bitcoin database, is synchronized within those confines. It is this synchronization that allows transactions within the Bitcoin wallet to be fully protected within the cryptography of the system. When you send money from one Bitcoin wallet to another, every transaction is protected by a secret code or private key that identifies each user.
Here are a few important points to understand;
— Once the cryptocurrency is made public, the source code that represents it cannot be modified.
— All wallet transfers are going to be instantaneous transfers.
— The only hacking that can occur is when hackers are able to get access to the private keys, typically stored on the user’s computer. Therefore, it is not any different than a robbery and is not a problem within the system itself.
— To claim your cryptocurrency, you simply need to have that key on a piece of paper or memorized, to access it. This is what eliminates the potential of computer hacking or crypto theft.
Why Is It So Appealing Today?
From its humble origins, well over 1000 cryptocurrencies have been developed- utilizing the original source code of Bitcoin – and just a small number of retailers will actually consider this form of currency as a payment. There are three that are at the top of the list which include Bitcoins, Peercoins, and Litecoins – these are considered to be the most stable, and all of them are approaching the mine limit that is built into their algorithms.
It is the volatility and fluctuations of this form of currency that typically motivate people to invest in cryptocurrency. These were originally launched back in 2009, and the price of a cryptocurrency, specifically Bitcoin, has gone from just a pound to well over £1000 since its inception. It is now considered to be a speculative asset, not so much an actual currency, and people that are making investments find it far more attractive than before. However, there is no anchor or government representing cryptocurrencies, with its foundation based solely upon those that are participating within the system. It is a market mechanism that drives cryptocurrency and nothing more. At the time that this is being written down, this so-called faith in the system is worth about £780, and that is for each individual Bitcoin, yet this does not spur the intrinsic value of Bitcoin more than users using the system.
The nascency of cryptocurrency, as well as its popularity, has led to legislative problems, and this is caused many positive things to occur. If you are trading cryptocurrencies within the confines of an exchange, or if you happen to be buying drugs online, you can avoid administrative and transactional costs that may otherwise be involved. In reality, cryptocurrency is primarily used in what is called Satoshi Dicer, a website that is primarily dedicated to online gambling. When people want to use these currencies in other ways, it is still a viable way of making payments, and generating profits, both domestically and internationally.