When one hears the word cryptocurrency he thinks of some character in a famous sci-fi film. No doubt the term cryptocurrency is related to the digital world rather a vast, continuously evolving, simpler than complex, that only understands the language of binary and that has practically no limits. It divides itself with the physical world by a wall of CRTs, LEDs, LCDs but has no less vastness as compared to the physical world.
Just like one does survive in the physical world using natural or man-made resources, similar is the case with the digital world. One only survives utilizing his knowledge, intelligence and wits in a righteous and legal manner. Cryptocurrency is basically an amalgamation of two words i.e., “crypto” meaning “an encrypted form of data” and “currency” meaning “a medium that is essential for an exchange in physical or monetary terms”.
Thus, in short, it can be defined as a medium of exchange that works in a digital space just like something on a monetary basis works in a physical world. Depending upon the technology the term cryptocurrency can be defined in a more proper manner. It can be defined as a decentralized form of digital money or asset that is based on a network and simultaneously is distributed across a large number of digital mediators i.e., computers.
It is a virtual form of currency that uses a complex technology called blockchain that allows it to work as a virtual currency and makes it secure against getting spent in a double manner or counterfeit. Cryptocurrencies are those types of systems that allow online payments in the form of “tokens”.
These tokens are represented by some kind of entries similar to the ledger in physical accountancy form. As Described the “cryptos” are some complex digital programmable algorithms and special techniques that have the capability to safeguard the entries made in the ledger making it secure from the outer world. The first cryptocurrency that was unknown to the world for several years after its creation that eventually is most famous today is Bitcoin.
Also, it is the first cryptocurrency that used the “Blockchain” technology that finally made it the most valuable currency in the present time. Today there are a number of different cryptocurrencies around the world like Ethereum etc. but their work is almost similar and based on the same digital platform and works on the same technology of blockchain. For many websites that are providing their clients with a proper guide to prevent regulatory risk, you can get free access from here.
Bitcoin was launched in the year of 2009 by a group that has the pseudonym “Satoshi Nakamoto”. Though in the initial few years it remained unknown to a large portion of people as the digital age progressed and the interest of people shifted to the online works, they got to know about this digital currency that has similar characteristics as that of the physical fiat money and minted coins.
The popularity of bitcoin can be estimated from the fact that there were over 18 and half-million bitcoins in the circulation that has a net estimated value of about $1000 billion. Keeping the value of other digital forms, it estimates about $2 trillion, bitcoin securing more than half the share of it.
Advantages: These digital currencies promise security and flexibility making the transfer of funds easier between two transacting parties without any need for mediators like banks etc. the public and private keys which are different incentive systems that work as proof of work. The wallets also use these keys making it a completely unbreachable form of a vault. Also, the funds are transferred at a minimal amount of fees too less than that of the physical money.
Disadvantages: As the nature of transactions is semi-anonymous thus it is a host of illegal activities like money laundering and tax evasion. Though privacy is an advantage but only when not used for illegal activities. The level of privacy is also different for different currencies. Thus, the world of cryptocurrency is as large as that of a galaxy. No one has ever counted accurately and no one has the capability to do so. It is just the wits and knowledge based on practical works that help in the progression and one should use it for legal manners without spoiling the platforms.