In the past year or so it was not hard to come across an article or a segment on TV that was not about cryptocurrency. Just what is cryptocurrency and what does it mean?
One of the interesting things about our technology is that it in an ever present state of evolution. It changed the way we did so many things from shopping to talking to other people. It was only a matter of time that it even tried to change the very thing that we used to exchange for goods and services.
What is Cryptocurrency?
This is a digital form of currency. While a lot of us thought that this was a byproduct of the last couple of years, it has actually been around since 2008. It was Satoshi Nakamoto that came up with Bitcoin. In case you haven’t been seeing the news lately, Bitcoin has been experiencing significant highs and lows in the market.
What makes cryptocurrency so different from other forms of currency is the fact that it is wholly decentralized. This means that it has no central authority like a bank. It is a peer to peer electronic cash system. So users of cryptocurrency can purchase something from a complete stranger and no one would have to know about it beyond the seller and the buyer.
Once a transaction is confirmed by both parties, there are no reversals in the future. Unlike other forms of payments, purchases, and remittances where you can ask for a refund and if you have a solid case, even the police can help you out—cryptocurrency has no such thing. Once you send the ‘money’ to another party, that’s it. So if you end up with a botched product or substandard exchange, there is no one who can help you get back what you paid for it.
As transactions are done peer to peer style, much like downloading a movie or sending a file, it can be done anywhere in the world. The only issue is the fact that there are countries like China that do not recognize Bitcoin and other forms of cryptocurrency as ‘real’ money that can be used in actual businesses.
One of the reasons why cryptocurrency is so popular is the veil of anonymity it provides for everyone involved. They could be ordering and exchanging illegal items but there would be nothing that would be able to link the cryptocurrency to real world people. There will be a record of what has been purchased and for how much. What will not be reflected in the record would be the real names and true address of those involved.
Cryptocurrency is here to stay and from the looks of things, Bitcoin is going to continue being worth a lot of money. If you are thinking of investing into Bitcoin or other forms of cryptocurrency, it would be important to weigh pros and cons.
Would you invest real world money in cryptocurrency?