Flat currencies are a plenty and when it comes to the virtual world we need something that nears the cybernetics concept. Liquid cash and paper cash may function in the physical realm but when dealing with online trading we need a safer and more secure way to own, pay or transfer cash.
Ever since the advent of online businesses and online banking, various countries have sought a means to harvest this financial ground that was still fresh. We could link our bank accounts, Master cards and Credit cards to online shops and stores and make purchases or transactions.
Although this means was efficient and you could shop or pay bills from the comfort of your home, cyber hackers grew in numbers and intelligence. They pose a threat to this virtual means of money transfers and transactions. It is estimated that close to $100 billion worth of the global economy is lost through fraudulent online transactions.
In existence today, there are close to 900 cryptocurrencies available online. Most of us are well aware of the Bitcoin which is one example of cryptocurrency and the earliest, other examples of this digital currency are: Litecoin, Ripple, Ethereum, Dogecoinm and Coinye.
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What is a cryptocurrency?
A cryptocurrency can best be defined as a digital asset designed to work as a virtual medium of exchange to secure online transactions and to control any additional units of the same currency. Unlike paper cash, crypto currencies are completely decentralized and have no central authority or server. Currently, the most common crypto currency, Bitcoin has a $45 billion market capitalization while its value is at $1,268 which is a couple of dollars higher that gold value.
7 facts on cryptocurrencies you didn’t know
- Sakoshi Nakamoto is the inventor ofBitcoin, the first ever crypto currency.
- Bitcoin was first invented as a peer to peer electronic cash system
- Cryptocurrenciesproduction is called mining while its system is called cryptography
- Users data is often protected and impenetrable
- Once a currency’s upper limit is reached it ceases to be minted
- Cryptocurrency accounts cannot be blocked or frozen
- Some countries in the world are working at legalizing the use of cryptocurrencies
The good/importance of cryptocurrency
1 No centralized control
Any activity on cryptocurrencies functions independently from government bodies bank systems and so on. Unlike other monetary options that are controlled by stringent laws and policies, a cryptocurrency user enjoys more control of his or her account without constant worry over control from a central server or authority.
2 It is safer to transact on cryptocurrency
Since it is an entirely different virtual form of exchange, not many people have the time or interest to understand its mechanics. People are still too indulged in the centralized currencies to go about hacking and stealing cryptocurrencies. One may think that because it is decentralized, hackers and thieves can easily maneuver their ways into accounts and still this digital asset. Unless you are very vague with your account, it is very hard for you to lose a crypto currency.
3 Some special online markets allow the exchange of cryptocurrencies to flat currency and vice versa
You can choose to trade on cryptocurrency and exchange it to flat currency whenever the need arises thanks to some special online markets. This trade has grown the cryptocurrency foreign exchange system tremendously and people are actually venturing into cryptocurrency trade as a source of income.
4 Most cryptocurrencies have a finite supply
Cryptocurrency mining is controlled by their source codes which contain instructions on the exact number of units that are allowed to exist. A new currency can be introduced for mining once a particular currency reaches its highest level.
5 Inflation is never the problem with cryptocurrencies
Since no central system controls their production and circulation, the least of worries for crypto currency users is inflation. Adaptive scaling is the preferred means used to measure crypto currencies to ensure that they operate well in both small and large quantities with no worry of inflation. New currencies can be introduced regularly with no monthly limit.
6 Geographical boundaries do not affect these currencies
The hefty transfer charges on flat currencies are one reason why people opt for crypto currencies. Another reason is the geographical dominance of particular flat currencies that makes inter currency exchange a complex venture. Geographical barriers do not hinder the crypto currency use additionally users enjoy swift transfers with low exchange or currency rates.
7. Currencies operate with a transparent cheat free system
Being the mother of all cryptocurrencies, Bitcoin underwent a lot of startup problems that were later resolved thus making the system more transparent and cheat free. Whatever you do on the currency’s platform is open for everyone to see and you cannot exploit the system or operate cheat transactions without others noticing.
8 Currency has an impenetrable data system
Cryptography is the system used when dealing with cryptocurrencies. This system is highly organized in as far as user data and transaction profiles and accounts are concerned. An outside hacker cannot penetrate this system nonetheless, in house frauds who are part oif it are the ones responsible for any unscrupulous ways that go against the system’s codes.
The bad and ugly side of using cryptocurrency
- Their operating mechanics are difficult for people to understand
Just as the flat currency exchange market isn’t a field meant for everyone it’s the same for these currencies. The rigidity and centralization of flat currencies makes them better off than crypto currencies again their large numbers and decentralized character makes dealing with them a complex matter. For this reason, many people interested in crypto currency trade buy them and leave them in the hands of those who claim to know and understand their mechanics. At this level, trusting a person with such an investment is a huge risk and due to this reason many people have been scammed or stolen for by those they entrusted their crypto currency affairs.
2. Crypto currency uses are uncertain
Everyone knows that the flat currencies have many uses, however, for these digital currencies, their uses are uncertain. Whilst you can buy goods and pay for any services with flat currency you may not be able to do the same with crypto currency.
3.Unauthorized or black market cryptocurrency mining cases are on the rise
Whilst crypto currency mining is an authentic venture it should be done with permission from the parties involved in its mining. At the moment there have been rising cases of crypto mining websites using computers from unsuspecting users to mine the currencies. This unauthorized entry is one problem that both parties need to deal with before it becomes a menace to the online community.
4. Its new nature is in itself a threat to its life
Flat currency has been around for a long time which means its concept, rigidity and mechanisms are less volatile. Bitcoin the first cryptocurrency was introduced in 2008 hardly ten years, so let’s just say the currency has been around for barely a decade. 8 years are not enough for a worldly recognized means of exchange to gain ground and popularity. For most of its life, many people will try to exploit its system and values unless the brains behind cryptocurrency figure out a more stable way of controlling its circulation and exploitation.
Perhaps you are one of those people hoping to make a transition from dealing with flat currencies to dealing with cryptocurrencies. These new age digital currencies are slowly gaining ground but it’s a wise move to always weigh what you know against what you don’t know. The major advantage is their decentralized nature, however if we thought of the wise man’s omen, we have no idea how long these currencies will exist.
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