Cryptocurrency is a volatile subject today. A concept now ten years old, it has matured quite eventfully; exploded rather than fermented, to allegorically state the massive uprise in the esoteric system. It isn’t a meek idea, trying to conform to the pre-existing norms of economy and finance; rather, it’s more like breaking down the doors or upending the table where banks, credit card companies and countless other ‘middlemen’ happily dine on their ten percent of your transaction.
How to define Cryptocurrency:
Let’s define a cryptocurrency as an alternative currency built not on a centralized bank, but on a global environment (in other words, a decentralized bank). That means that cryptocurrency won’t ever be managed, restricted or regulated in any way by a corporation or any particular person or persons. It is a personal property relying on millions of computers worldwide. This is not an exaggeration; globally cryptocurrency has more than ten to one hundred million times the computing power of Google.
How Cryptocurrencies Works:
The entire system is built on trust, transparency, and extreme security. Every transaction made in a ten minute interval is recorded, highly encrypted and uploaded by ‘miners’ (geeks with incredible tech skills) and added to all previous records, in a “chain” of records called the blockchain. Anyone can see it, with the correct permissions, but to modify it is technically impossible (i.e. it’s ‘immutable’). Seriously, the blockchain is perhaps the safest and most trustworthy currency exchange system ever devised.
Paying 2% instead of 10%:
This means that you can make safe, secure and almost instantaneous transactions in crypto coin, paying lower percentages in fees while going through fewer intermediates. Like if you want to send money from, say, Canada to Manila, it could take as little as twenty minutes, and could cost just 2%, whereas a bank would charge around 10% of the fiat currency (normal currency) and take days.
Be Secure Online:
Many blockchain transactions are so secure, the seller and buyer don’t even know each other. The advantage of this is that, while companies like Google thrive off the selling of your data to third-party companies, a blockchain transaction leaves no ‘cookies’ for them to follow. As Don Tapscott said in a June 2016 TED talk, ‘privacy is the foundation of a free society’, and cryptocurrency is the flagbearer of privacy online.
What It Boils Down To:
Basically, there are two kinds of cryptocurrencies: coins and tokens. The difference? Coins are units of explicitly monetary value and are stand-ins for fiat currency; crypto tokens, on the other hand, encompass all other assets that don’t have a purely monetary nature, like a piece of art or a song. Tokens, or as we might call them, crypto coin tokens, are much more secure in cryptocurrency, and that is why Grammy-winning artist Imogen Heap actually made her own music available via cryptocurrency. Read more here.
How to buy safe and smart:
To be fair, there are several scams in the world of cryptocurrency, and with Bitcoin prices as high as they are right now, nobody wants to be burned. Fortunately, there are tips to make the right choices when buying crypto coins and crypto tokens and to help understand which type suits your needs best. Check out this link
Again, with cryptocurrency still in its infancy, it doesn’t hurt to stay tech-savvy, so the terms involved sound like geek-speak than Greek to you.
Where Does Bitcoin Get Involved?
You see, it all started with the introduction of Bitcoin after the global recession of 2008. Bitcoin became the first system to introduce the blockchain, and it spread like wildfire. In the cryptocurrency world, which we shall dub Cryptopia, there are two types of cryptocurrency: those that use Bitcoin as the foundation and those that don’t. Still, Bitcoin is the metric against which all things in the global environment are valued.
How Crypto is impacting the real life world:
Now that you have a basic understanding of cryptocurrency, let’s take a look at its impact. The most immediate and dramatic effects will be seen in the way financial services are done.
THE FISCAL WORLD
- To compete with cryptocurrency banks must become more efficient and faster, because cryptocurrency will replace banker’s hours with banking hours.
- Banks will have to cut down on their slice of the pie; 10% will need to come down to 2% if banks want to keep their role in managing our money.
- All currency will need to become more universal to mirror the universality of cryptocurrency.
Of course, all this is based on the assumption that they embrace cryptocurrency with open arms. The only other alternative is to be buried beneath the wave of innovation.
How Cryptocurrency Effects Physical Environment
Some have gone as far as to look into the effects of cryptocurrency on the physical environment. Investopedia has an interesting article about the energy consumption average increase due to bitcoin and by extension, cryptocurrency usage. While the data is still being generated as cryptocurrency usage increases, it just goes to show that cryptocurrency will change the world, literally.
Cryptocurrency in Media
We’ve all seen the media rage on about cryptocurrency. Imogen Heap is just one example of this alternative form of currency being used to protect copyright interests in a way that no fiat currency (normal currency) can do. The best part? Artists choose how they advertise their product and how much they profit from it. The future of music and arts may be more entwined with cryptocurrency than anyone could predict.
Should I Invest In Cryptocurrency?
The short answer is yes, but not just because the future of this currency is lucrative, not just because it’s a gold mine selling cheap. It’s not just because the world will soon depend on Bitcoins, on Ethereum and other services. It’s because cryptocurrency is a valuable asset, not like any other. It’s not infallible or perfect, but it is going to make gold look like Play-Doh. And it’s a sign that humanity will innovate till eternity.