A cryptographic money (or digital currency) is computerized resource designed to function as a medium of trade that uses strong cryptography to secure financial exchanges, control the making of extra units, and verify the exchange of assets. What is Cryptocurrency? is most searchable question in Google. Cryptocurrency is a sort of digital cash, virtual cash or alternative cash. Cryptocurrencies utilizes decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
History of Cryptocurrency
There have been numerous attempt for creating digital currency during the 90s tech boom, with frameworks like Flooz, Beenz and DigiCash emerging on the market but inevitably failing. There were a wide range of explanations behind their failures, for example, fraud, financial markets even frictions between organizations’ employees and their bosses.
Notably, those frameworks used a Trusted Third Party approach, meaning that the organizations behind them verified and facilitated the exchanges. Due to failure of these organizations, the creation of a digital currency was seen as lost cause for a long while.
Then, in early 2009, an unknown developer or a group of programmers under an assumed name Satoshi Nakamoto presented Bitcoin. Satoshi depicted it as a ‘peer-to-peer electronic cash system.’ It is completely decentralized, which means there are no servers included and no central controlling system. The concept nearly resembles peer-to-peer system for files sharing.
One of the most important issues with any transaction is that it needs to be checked for double-spending. The traditional solution was a third party – a central server – that kept records of the balances and exchanges. However, this method always entailed an authority basically in control of your funds and with all your personal details on hand.
In a decentralized network like Bitcoin, each and every member needs to carry out this activity. This is done by means of Blockchain – a distributed ledger of all exchange that ever happened within the network, is available to everyone. Therefore, everyone in the network can see every account’s balance.
Every transaction is a file that keeps the record of the sender’s and beneficiary’s public keys (wallet addresses) and amount of coins exchanged. The exchange should be closed(signed off) by the sender with their private key. In the long run, the transaction is broadcasted in the network, but it needs to be confirmed first.
Inside a What is cryptocurrency network, no one else other than miners can confirm the transactions by solving a cryptographic puzzle. They take transactions, stamp them as genuine and spread them across the network. Every nodes of the network adds it to its database. Once the transaction is confirmed it becomes unforgeable and irreversible and a miner gets a reward, in addition to the transactions fees.
Cryptocurrencies are so called because the consensus keeping process is guaranteed with strong cryptography. This, alongside previously mentioned factors, makes third-parties and blind trust as a concept completely redundant. Now a days you can also track of the latest price and current changes of cryptocurrencies like Bitcoin, Ethereum, Litecoin and more through crypto tracker.
Where Cryptocurrency can be used?
In the past, it was difficult to find a merchant that accepts cryptocurrencies but now, the situation is completely changed.
There are lot merchants available both online and offline accepting payments in the form of cryptocurrency. They range from small shops to big stock markets. Now, the bitcoins can be used for payments of hotels, computers etc.
Most of the people think that cryptocurrency is the hottest investment opportunity. There are recently many stories of people becoming millionaires through investment in bitcoin. Bitcoin is the cryptocurrency whose value is increasing exponentially. Last year, the BTC was valued $800 and towards the end of June 2018, it crossed $8000.
After BTC, Ethereum is the second most valued cryptocurrency which has recorded the fastest growth which any of the cryptocurrency has ever shown.
However, the cryptocurrency involves high-risk investments as their market values fluctuates like no other asset’s. Moreover, it is partly unregulated in some countries, so there is chances of getting outlawed.
Miners are the most important part of cryptocurrency network, and mining is quite similar to investment. Miner provide their computing power to solve complicated cryptographic puzzle, which is important aspect affirm a transaction and record it in distributed public ledger, known as blockchain.
The interesting fact about mining is that the difficulty level of puzzle increases constantly, correlating with the number of peoples solving it.
CryptoCrontrol: Crypto News Aggregator It is an umbrella for latest Blockchain and Cryptocurrency news.
As Payment Option:
If one had a business, he/she can accept the bitcoin as payment for the service provided which will attract more new customers. The people are now highly interested in cryptocurrency and it’s going to increase with the passage of time. Along with this growing interest, the number of crypto-ATMs are going to increase around the world. There are various services one can use paying through cryptocurrency.
For tax, US-based businesses which are accepting cryptocurrency, need to record a reference sales, amount received in particular currency and the date of transaction. If tax is payable, the due amount is calculated based on the average exchange rate at the time of sale.
Are Cryptocurrency Legal?
What is cryptocurrency? is the question search by user mostly but along with that they are also searching about the legality of that. As the cryptocurrency is popularizing, in the market, law enforcement agencies, tax authorities and legal authorities worldwide are trying to adapt and understand cryptocurrency and find where exactly do they fit in existing regulations and legal frameworks.
With the introduction of bitcoin, and its working meachanism behind i.e., decentralized nature making it self sustained currency without any physical shape.
Bitcoin and cryptocurrency were prohibited just in Bangladesh, Bolivia, Ecuador, Kyrgyzstan and Vietnam, with China and Russia being very nearly restricting them too. Different jurisdications, don’t make the use of cryptocurrencies illegal yet, but the laws and directions can change definitely relying upon the country.
Future Of Cryptocurrency:
The views of few influencing people in regard to the future of cryptocurrency are:
According to Bill Gates, co-founder of Microsoft, investor and philanthropist:
“Bitcoin is exciting because it shows how cheap it can be. Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.”
Richard Branson, founder of Virgin Galactic and more than 400 other businesses:
“Well, I think it is working. There may be other currencies like it that may be even better. But in the meantime, there’s a big industry around Bitcoin. — People have made fortunes off Bitcoin, some have lost money. It is volatile, but people make money off of volatility too.”
Al Gore, former Vice President of the United States:
“When Bitcoin currency is converted from currency into cash, that interface has to remain under some regulatory safeguards. I think the fact that within the Bitcoin universe an algorithm replaces the function of the government …[that] is actually pretty cool.”
Eric Schmidt, executive chairman of Google:
“[Bitcoin] is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value…Lot’s of people will build businesses on top of that.”
Peter Thiel, co-founder of PayPal:
“PayPal had these goals of creating a new currency. We failed at that, and we just created a new payment system. I think Bitcoin has succeeded on the level of a new currency, but the payment system is somewhat lacking. It’s very hard to use, and that’s the big challenge on the Bitcoin side.”