Cryptocurrency is a topic that has been fascinating people since its inception. The entire concept of digital cash and mining cash is not something you can see in your waking life. However, with every new thing on the rise, a set of conjectures accompany it. So has also been the case with cryptocurrency. Not many people know about what it exactly is, and there is rampant ignorance, and this leads to the rumors that are afloat about it. This article is a humble attempt to understand what cryptocurrency is and examine all the factors related to it. Hopefully, the information readers acquire from the article will provide some education and enable them to make better decisions when it comes to digital currency.
What Is Cryptocurrency?
There are several intricacies related to the entire concept and working of cryptocurrency. But, we shall start with a working definition before you lose your interest. Simply put, cryptocurrency is digital currency that is managed using high-end encryption methods. It all began in 2009 with the revolutionary creation of Bitcoin, before which it was a mere idea. The concept of Bitcoin and its subsequent creation shot to fame, and its market value kept rising for the next couple of years. However, the value saw a gradual dip, and this is when the future of cryptocurrencies started looking bleak and questionable. The journey of cryptocurrencies has been quite erratic since its onset, and people are still apprehensive about its utility. There is a widespread dilemma regarding how well this digital form of currency would replace or add on to real money. Understanding how transactions work with cryptocurrency might not be Nuclear Physics, but it sure is not as convenient as handling cash in real-time. Also, there are several other things that you must be aware of if you want to delve into this area. Have a look at Forex Academy should you require more information and news from the world of cryptocurrency. Therefore, without further ado, we shall now take a look at the various dimensions that dominate the spectrum of this digital currency.
The Basic Features of Cryptocurrency:
We have tried to enlist all the features that you must know when you are just starting to gain an insight into the world of cryptocurrency. Some of them might seem esoteric, but hang in there and read through them all before entertaining the thought of giving up. At an age when Bitcoins have swept the world with its ostensibly promising future (an idea that can be deliberated upon sometime later), it does not do to turn a blind eye towards it and decide to settle in the bubble of ignorance.
The very first thing that one must understand while trying to learn about cryptocurrency is that it makes use of various cryptographical features with the internet as the medium, to manage a plethora of financial transactions. The method that cryptocurrency involves to bestow upon it a decentralised, transparent and secure nature is the technology of blockchain. If you have been wondering about what use ‘decentralisation’ has in the topic of cryptocurrency, let us inform you that decentralisation keeps unwanted government interference at bay and sees to it that there are no unnecessary complications resulting from involving the country’s government in the middle.
Cryptocurrencies help in financial transactions between two parties directly, and it uses public and private keys for the process. The utility of this is that there is a bare minimum processing and transaction fee involved, unlike traditional financial institutions, when you deal with cryptocurrencies.
Blockchain and Cryptocurrency:
When you go about a financial transaction with cryptocurrency, the whole network involved with it knows about the transaction almost immediately. However, it takes times for the transaction to be confirmed. This is where you need to know what happens when before and after the transaction is confirmed. As long as the transaction is not confirmed, it can be forged. However, as soon as it is confirmed, the transaction cannot be reversed or forged. It is closed and goes into the record of transactions known as blockchain.
This is the point where we should talk a bit about miners and their role in confirming the transaction. Miners confirm the transaction by stamping them as legitimate. Only after they do so can the transaction be considered complete and be etched into the blockchain network forever.
Amidst all the apprehension and doubts regarding the future of cryptocurrency, it is still regarded as digital gold. The value of cryptocurrency shows immense potential of growth; though, at times the market might be quite rough. Also, you must acknowledge the fact that cryptocurrency has more utility for investors and speculators than fulfilling everyday usages. We are talking about a huge amount of cash and several transactions when it comes to investors. Therefore, cryptocurrency, given its high-end encryption and security protocols, can be considered as one of the safest and most secure means of handling such transactions.