Cryptocurrency and the Importance of Coin-Banks

Cryptocurrencies are basically the digital media which is used for the exchange of funds with the use of cryptography & shared transaction ledgers creating a secure, traceable, anonymous & a potentially stable system. The name Cryptocurrencies comes from its use of a technique of cryptography where it basically refers to the study of the methodologies of achieving encryption of information. In fact encryption is important from the point of view of data security & authentication whereby it allows for the messages to be sent securely and privately.

In the couple of decades prior to the year 2008, many attempts were made by the developers to create a currency which would be decentralized and which would rely on the protocols of cryptography & distributed networks. However, the idea only took root; post the launch of Bitcoin, post which multiple followers over the globe got attracted to.

Current market scenario for cryptocurrencies

Bitcoin currently is the most popular and well known cryptocurrency. However, it is not the only one in the market, and there are several other currencies which have varied levels of popularity, originality and values. And based on these values, they are used during the coin-banks exchange. The cyptocurrencies other than Bitcoins are often known as altcoins. And while it is true that most of the altcoins are simply clones of the original bitcoins, the ones which are successful, are not only unique, but also offer an advantage or a hook, that bitcoin chose not to offer, or can’t offer. Some of the popular altcoins in the market include- Ripple, Litecoin & Dogecoin.

Working of Cryptocurrencies

Cryptocurrencies currently trade based on the principles of mathematics, rather than any of the government or financial instruments. And while the cryptocurrencies still depend on the perceived value, the shortage or excess for them cannot be based on one person or say one group. They can never be valued based on the availability of goods such as gold. They can also never be created artificially by the government or the financial institutions.

Technology behind cryptocurrency

Cryptocurrencies use a peer-to-peer distributed network which is kept secure using algorithms & public ledgers. To ensure the legitimacy of every transaction, complex mathematical formulations and equations are used such that each each account is linked with the amount, the account holder would want to spend. The users, popularly known as miners, offer their computing assets to solving these mathematical equations, whereby they are rewarded a generous amount of cryptocurrency.

Future of cryptocurrency

Currently the cryptocurrency is a bit unstable as there is very less demand in the market. As the market size and the demand for these cryptocurrencies grow, surely they would be more stable, with some people even pointing out to the fact that they would be more stable than the currencies. Cyptocurrencies are intended to be rare, and they generally cannot be inflated or deflated quickly, but happen at a controlled slow pace.

Cryptocurrencies have the perfect recipe to change and improve the financial world & in its short span of existence, it already has. Thus we will have a stable currency which cannot be changed as happens with a few governments. What do you think, would cryptocurrecies be the money in the future?

Author:.

Awais Ahmed is a student, blogger and digital marketer who helps small entrepreneurs to improve their online presence. He has a range of interests including technology, apps and small business.

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