If you haven’t heard about cryptocurrency, then, we might not be living in the same world. When you listen to people discussing digital currency, there’s often a buzz around it. Some people believe in its longevity, but others seem to hope that it is a bubble that will burst, sometime.
But before we debate whether cryptocurrency is here to stay or not, do you know what it is? You are probably working on your excel homework and stumbled upon this article. Well, if you are a student who would like to understand the issue of digital currency, you are in the right place.
What is Cryptocurrency?
It is a type of digital money which by using encryption, helps to secure transaction. It is also useful in controlling the creation of new units. An example of such currency is Bitcoin. It is the most popular cryptocurrency that is circulating the internet.
The value and price of Bitcoin depend on the supply and demand of the currency, and its monetary usefulness. There is no doubt that cryptocurrencies are changing the financial world. What we are still yet to determine, is how they will alter both the national and global systems of finance.
Everything You Need To Know
Maybe as you work on your Microsoft excel assignments, you are wondering should I give digital currencies much through or not. Well, we hope that this article will help you have a better understanding of the intricacies of cryptocurrency. It is the first step towards making a choice.
It emerged as a side product of an invention by an unknown person with the pseudonym Satoshi Nakamoto. He is the unknown inventor of Bitcoin. He described this invention as a “Peer to Peer electronic cash system.”
It allows one to make online payments, to another person without having to go through a financial institution. The recording of payment transactions is through technology we hear referred to as Blockchain.
It is a technology the experts consider, unhackable. It ensures the security of the transactions. It even reduces the cost of verifying transactions. Deals happen directly between individuals.
On each transaction, the records are made on a digital ledger. That is Blockchain. Different cryptocurrencies have different blockchain. Miners are the ones who confirm transactions. Upon confirmation, the deal is set in stone.
• Mining of Cryptocurrency
It is a tricky process that requires time and a powerful computer. Miners compete to solve a cryptologic puzzle. It is a complex math problem. The first one to solve the puzzle, adds its transaction to the blockchain. And, they also receive a monetary reward.
Miner can find Bitcoins faster using hardware and software that is custom built for mining. As each miner processes and secures a transaction, they solve a dual function. As more people join in mining cryptocurrencies; that harder it becomes to find one.
For Bitcoin, in particular, its price has been on the rise gradually. Its design is in such a way that, at any time, they can only exist 21 million bitcoins. It is a rule in the protocol of the tokens.
Its value depends on supply and demand, and unlike other physical tokens, it doesn’t rely on the value of silver or gold. Every ten minutes, the release of new bitcoins is at the rate of 25 new coins, for that period.
The future of Cryptocurrency
Recent years have seen an increase in the use of cryptocurrencies in financial institutions. It is going mainstream with big brands accepting transactions using cryptocurrencies. Also, nations that suffer from hyperinflation are increasingly using bitcoin, e.g., Venezuela.
Many who invest in cryptocurrency do so due to their belief in the anonymity, reliability, and transparency levels that it offers. With the increased popularity of cryptocurrency, it has led to the introduction of second-generation cryptocurrencies, e.g., Ethereum.
The value of traditional currencies relies on the central banking system. However, with cryptocurrencies, speculation drives its value. Which results in fluctuation, of the same. Bitcoin is also popular because you can make transactions with your cell phone.
It is a fast and secure way to transact your dealing which may raise concerns on the use of the currency to fund criminal activities.
Whether it is a bubble or not, cryptocurrency is here with us. No one can state for sure, that it is not here to stay. Computer security experts and economists say the future may not be based on Bitcoins. And the keyword here is “may.”
But no one can state with certainty that it won’t depend on other cryptocurrencies. Well, with the basics of what cryptocurrency is all about, the choice to invest in it lies with you.
Ooh! And keep working on your excel homework assignments.
Eva Read is a professional writer and a content manager. She find inspiration in music, yoga and books. Her life motto is “Opportunities don’t happen. You create them.”