3 Things To Know About Cryptocurrency
Due to their nascent status, and several other factors, cryptocurrencies remain obscure, understood by few and appreciated by fewer. In recent years however, the need to transact quickly and securely has made them irreplaceable, and so here are a few main points to know about them.
Cryptocurrency is fast, safe and decentralised
- Cryptocurrencies operate by cutting out intermediaries. Normally, with cash or ‘fiat’ currency, every transaction has to go through dozens of hands; one credit card purchase has to be verified by up to 70 different companies! But if you would make a transaction with, say, an Amon card, you could complete a transaction several times quicker, even though different currencies. Imagine buying something in Euros and paying in Dollars. With fiat currency that would take several days, a week even. With cryptocurrency this conversion is actually very fast. Several types of cryptocurrency cards can even accept other cryptocurrency, like the aforementioned Amon card. Read more here.
- With any other plastic card, you could be afraid of losing all your money should someone hack into your account. With a virtual debit card like a Bitcoin card however, your assets would be unbelievably safe. The blockchain, a sort of immutable ledger, ensures that the idea of hacking into a cryptocurrency account is nothing short of impossible. Let’s not get into the details here, because that’s a whole different argument, but you should take my word for it.
- Cryptocurrencies are decentralised, so they are not affected by regional or national events to the extent that fiat currencies are, and they do not answer to any central authority. Hence, they tend to be more secure and allow you to make transactions anonymously. Unlike banks, which need your personal information which can be shared with other third person companies, the blockchain can allow transactions to occur without the two parties even knowing each other in the slightest. This results in very fast and extremely secure transactions. Moreover, an advantage of this is that it makes it impossible to hack a blockchain, because to do so, you would need to crack high level encryption, across all the files in a blockchain (which are updated every ten minutes) in every computer connected to the blockchain, at the same time. It’s seriously difficult. That’s why people say that cryptocurrency is failsafe, and hey, from where we’re standing, we agree.<7li>
Cryptocurrency is Universal
- With a single type of cryptocurrency credit card, many cryptocurrencies can be purchased, and easily converted from one form to another. For example, cryptocurrencies based on the bitcoin blockchain usually are interchangeable, or are very similar in price and value.
- Even virtual assets like crypto tokens are easily converted to real fiat money, through special cryptocurrency A.T.M.s. They accept all kinds of virtual assets and will readily exchange them at pretty good prices too.
Ahead, we will discuss just how universal cryptocurrency can be, so keep scrolling on.
There are several kinds of cryptocurrency
- There are several kinds of cryptocurrency. The basic three types are:
- The types that use the Bitcoin blockchain. A good example of this is Tether, to name one amongst thousands. These currencies built their code around the pre-existing Bitcoin blockchain and created ‘forks’ in the coding where they diverged in idea and value. However similar their basic coding is, they have evolved differently and are independent of each other today.
- Alternative coins, which use their own coding and blockchains, completely unrelated to Bitcoin in value and idea. They are made for different purposes than Bitcoin and thus have different uses. Examples include Litecoin, Dogecoin, Ethereum and many, many others. An important feature of some of these currencies is that they are also a sort of electronic contract, or e-contract. This is especially true for Ethereum, which basically can only be paid once the terms of an agreement have been fully met. This means that cheating in a deal would nullify any promise of compensation, and that the currency enforces its own rules better than any legal system. Read more here.
- Then there are the third, and perhaps most dramatic and unexpected cryptocurrency: companies themselves. What I mean to say is that every corporation or business acts like a cryptocurrency and causes similar disruption in the global market to a cryptocurrency. They have value (shares and stocks) and operate similar to cryptocurrency itself. These companies, quite confusingly, often invent their own cryptocurrencies as well, like the in-game money found in many video games that can be purchased with real life money.
However, they do not show the universality of cryptocurrency in that one company’s shares can definitely not be interchanged with another. It would be preposterous to think of buying a car with Microsoft shares, right? Somewhere in between they would have to be sold and fiat currency would be involved. Cryptocurrency like Bitcoin however, are very malleable and one type can buy a plethora of items.
- In fact, all real world items sold in cryptocurrency are valued against Bitcoin. That makes it the most important cryptocurrency of all and is why it is so expensive. Bitcoin is the backbone of cryptocurrency today because it introduced the whole blockchain system as we know it way back in 2008.
- As we mentioned earlier, different types of currency have different uses but are still interchangeable at many A.T.M.s across the world. This system relies on your cryptocurrency account, called a wallet, where your assets are stored. The best part? You can securely and safely access these assets using a virtual debit card anywhere, anytime. If you’re low on cryptocurrency, you can buy Bitcoin with a credit card safely and quickly too.
- As cryptocurrency becomes more and more banal and less esoteric, your virtual debit card will become a very easy to use payment card, allowing quick transactions on the go.
All in all, understanding cryptocurrency will help you make the best possible decision when it comes to buying in on the newest and perhaps the most lucrative technological breakthrough of this generation. Gone are the old days of relying on banks to move funds. The modern age needs speed and efficiency, which cryptocurrencies are just unmatched in providing.