If you’ve heard the term “cryptocurrency” or “Bitcoin” batted around and felt your eyes glaze over, you’re not alone. While many people have heard of these terms, most couldn’t actually tell you what they are in fact. Let’s give you a leg up and explain a bit about cryptocurrencies and how they work.
What is a ‘Cryptocurrency’?
A cryptocurrency is a virtual or digital currency that utilizes cryptography for security. This makes it impossible (to this point) to create a counterfeit currency. You can further read about it here.
Let’s take away all the clamor around cryptographic forms of money and simplify it to a straightforward definition: Cryptocurrency consists of “restricted entries or sections in a database which nobody can change without meeting particular conditions.” This is the most basic way to explain what a cryptocurrency is and how it works.
Now, let’s take an example of balance on your account. Cryptocurrency accounts are also restricted entries or sections in a database for which particular conditions need to be met in order to be changed. You can think of them as notes and coins. What’s their value? What are they besides entries in an open database?
Those currencies are yours only if certain criteria are matched and you physically claim the coins and notes. You own your money if it is verified and confirmed in some sort of database of balances, accounts, and transactions.
A Few facts about cryptocurrency:
The mysterious nature of digital currency exchanges has led to them to be used for a large group of illegal activities for example, tax evasion and money laundering. The principal digital currency to capture people’s interest around the world was Bitcoin, which was introduced under the pen name Nakamoto. In September 2015, there were more than 14.6 million bitcoins available for use with an aggregate market estimation of $3.4 billion. Bitcoin’s prosperity has generated various contending cryptocurrencies, such as Namecoin and PPCoin.
A company called CannaSOS has launched a new cryptocurrency system based on decentralized blockchain technology as part of a worldwide, multi-level, non-cash transaction platform operating on an autonomous PerksCoin (PRC) tokens.
The new crypto-currency platform will be funded via an Initial Coin Offering (ICO), akin to a Kickstarter, that began on November 10 and ends on February 28. The PerksCoin is planned to be used for both transactional purposes and as a loyalty program. You can read more information about the presale and their token on their landing page.
How to get Your First Cryptocurrency Coin:
The nature of cryptocurrency can be difficult to understand when you’re used to thinking about a hard currency for which ledgers are kept in a central location. A cryptocurrency consists of digital tokens or coins. That currency is more secure than a paper dollar bill.
Name of some cryptocurrencies:
- Bitcoin (2009)
- Litecoin (2011)
- Namecoin (2011)
- Peercoin (2012)
- Ripple (2013)
- Dogecoin (2013)
- Primecoin (2013)
- Mastercoin (2013)
- Auroracoin (2014)
- PerksCoin (2017)
Top 5 Reasons to use Cryptocurrencies:
- It’s quick and modest.
- There are no chargebacks.
- It’s as private as you need it to be.
- They don’t rely on a central authority which could be compromised.
- Individuals can’t take your data from traders.
Advantages of cryptocurrencies:
These above reasons to use cryptocurrency can also be considered as its advantages.
- Safe and secure
- Fast and easy payment
- Low to no fees
- No cases of fraud
- Disadvantages of cryptocurrencies:
- Not Widely used and Accepted
- Losing Your Wallet
- Irreversible Payment
I hope now you understand what cryptocurrency is and how it works in this digital era. The cryptocurrency market is growing day by day and savvy investors are gaining huge profits from ICO’s.
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