What is cryptocurrency or Digital Currency?
A cryptocurrency uses encryption (the process of converting information or data into a code, especially to prevent unauthorized access) is to verify the transfer and ownership of digital coins across a network of computers.
As per Investopedia “Cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature.” This is what cryptocurrency means.
Cryptocurrency is growing extremely rapidly. Everyone knows about Bitcoin, but often there is a lot more growth in Altcoins, Ripple, Ethereum, Steller, Litecoin, etc, like this, there are more than 1600 cryptocurrencies.
The total market capitalization of all these Cryptocurrencies is 18,442 BILLION Rupees as per coinmarketcap which varies day to day.
The recent one is PETRO GOLD founded by Venezuela Government which is backed by Venezuela’s reserves of oil announced by president Nicolas Maduro proposed on 21 February 2018 as per Wikipedia data it is in the process.
Bizmates.in provides the basic information to make the cryptocurrency market less scary to everyone.
Our mission is to simplify the market and make it understandable to everyone driving the adoption of blockchain technology.
Before I get into technology which is backed by cryptocurrency. Let us know few natural questions when human hear about digital currency. Like,
- What makes a cryptocurrency?
- What is unique about cryptocurrencies?
- How are they different from traditional currencies?
- What is Blockchain technology?
- Why are people so excited about Blockchain technology with the examples?
What is unique about cryptocurrencies?
Some Uniqueness about Cryptocurrency is like,
- There is no central authority. Where in fiat currency (Money that has indirect market value or is given legal tender status by government fiat), or government-backed currency, the rules governing the supply, transmission, and distribution of value can be unclear, in cryptocurrencies, all rules are transparent and are part of public record.
- Balances are often recorded and held on a massive global ledger called the blockchain.
- Balances are held entirely electronically with no physical counterpart like paper money or gold.
- Cryptocurrencies have a total, verifiable, supply and a price which can let you derive a “market capitalization”. The market capitalization represents the total theoretical value of all tokens in existence.
Difference Between Cryptocurrency and Money(Fiat currencies)?
Crypto is so exciting because it is freely tradable and can be transferred anywhere in the world very quickly.
There are no trusted parties. Unlike banking systems, there is no Clearinghouse or trusted parties who can block or freeze transactions.
Finally, it is extremely low cost and efficient to move value.
Miner transaction fees are low cost (Miner are those ones who confirms transactions in a trustful manner when enough computational power i.e. effort is devoted to a block) and don’t scale with amounts making cryptocurrencies very effective and efficient store of value.
Crypto has been growing extremely quickly which has put the investment spotlight on it. So, lets to summarize the Difference between Cryptocurrency and money (fiat or government-backed currencies).
Cryptocurrencies are aiming to be better money. They aim to replace existing financial instruments and tackle a massive market.
Cryptocurrencies have been gaining major media attention with all the millions made and hacked.
Furthermore, cryptocurrencies have all the unique benefits that we covered above like,
- No central authority
- No intermediary
- Low cost,
But most of all… More than just currency-blockchain technology is being used to create more things than digital tokens.
What is Blockchain Technology?
The Blockchain is a distributed database of records or public ledger of all transactions or digital events that have been executed and shared among participating parties.
Each transaction in the public ledger is verified by consensus of a majority of the participants in the system. And, once entered, information can never be erased.
The Blockchain contains a certain and verifiable record of every single transaction ever made.
Why are people so excited about BlockChain?
Blockchain has the power to revolutionize computing as we know it.
First, let’s see what it means to be better money.
We came to know the total market size of cryptocurrencies as of June 2018.
If cryptocurrencies were to replace money, we would see a similar market capitalization to that of gold or spendable money.
But blockchain can be used for more applications than currencies like Bitcoin.
We will go over a few examples of what blockchain is being used for today.
Example 1: Siacoin
Siacoin is a decentralized private file storage system.
The Siacoin token is used to drive the service.
The Sia network organizes storage devices all over the world into a massively distributed file system.
This lets people earn Siacoin for providing extra storage space and spend Siacoin to store files on the network.
Siacoin is a promising technology in the world of Fog Computing (Fog computing is a term created by Cisco that refers to extending cloud computing to the edge of an enterprise’s network. Also known as Edge Computing or fogging, fog computing facilitates the operation of computing, storage, and networking services between end devices and cloud computing data center’s, this is as per webopedia).
Siacoin which uses blockchain to organize networks of computers for computational tasks.
Example 2: Augur
Augur is creating blockchain based prediction markets.
Using Augur, you can create prediction markets for any event such as presidential elections, stock prices or even the weather and have people trade against the outcome.
This is powerful because it allows anyone to gain insights and forecasts into the future and furthermore could be used for price discovery in giving intangible events value.
Augur is a promising technology in being a decentralized prediction market.
Example 3: Steem
Steem is a blockchain based social media platform.
Steem uses blockchain for content discovery.
Steem rewards users who provide value in interacting with the platform.
Steem rewards you if you consistently post high-quality content. Or who consistently upvote high-quality posts. And rewards can be in the form of coins or influence.
Steem is a promising decentralized community-oriented social media platform.
Since cryptocurrency is so open,
- It is easy for anyone to invest with high returns.
- It is easy to have high transparency and gain insight into coins and they are highly liquid meaning
- It is easy to buy and sell.
- Rapid growth makes these coins highly attractive investments.
For the first time, the average person can invest small amounts into revolutionary ideas. In short, blockchain is revolutionizing many industries all at once showing a promising new technology on the rise.
- From many scammers and hackers.
- Small mistakes can lead to costly later.
- Extremely volatile market.
- Very early technology, in marketing terms we can say it as a Pre-matured product for society.
And Do not invest in anything which you can’t afford to lose.
By this, I will conclude today’s post. Hope you guys found this helpful.