11:21 07th Aug, 2020
Cryptocurrency: The Currency of the Future
Many investors who had no idea about any sort of cryptocurrency started to look towards the profit in this digital asset.
Bitcoin surged in the public consciousness during late-2017 when one bitcoin was suddenly worth 20,000 dollars. Overnight nerdy bitcoin miners became millionaires, and the ignored coder cousin of the family became everyone's favourite. Many investors who had no idea about any sort of cryptocurrency started to look towards the profit in this digital asset.
Heralding the times of a digital market, Bitcoin is a pioneer in the fresh field of crypto-currency that is slowly and steadily changing the finance landscape. There are many important subsets of the Bitcoin concept outlined in the bitcoin billionaire.
Bitcoin first emerged in January 2009 under mysterious circumstances. It was founded by a still-unidentified group (or individual) under the name of Satoshi Nakamoto. The central idea of the concept was that Bitcoin would be a revolutionary new form of currency that will operate in a peer-to-peer network. This means a financial transaction that involves bitcoins will be carried out directly between the two parties without the need of a third-party overseer, as is done in credit cards and online transactions.
Blockchains and Miners
The process is carried out through block-chains. A block-chain is essentially a collection of blocks where each block is a group of transactions involving bitcoins that are bunched together and stored in a decentralized manner. These decentralized public ledgers are maintained by "miners" who are motivated by rewards in bitcoins itself. These rewards are limited by their number, with only 3 million of them remaining currently. This helps to eliminate issues like inflation that is caused by normal currencies.
Transparency and security
The ingenuity of Bitcoin lies in the way it's operated. The block-chains that are made to record all transactions are completely transparent. These can be seen developing live by any user. For breach of security, the hacker would have to control 51% of the computational power spent to maintain the ever-widening Bitcoin chain, which, with already 10,000 nodes, is difficult to achieve. And even if the hacker manages to perform this seemingly impossible task, the user may just create another block-chain and foil the villain's efforts completely. Along with that, numerous layers of coding involving rigorous cryptography makes the hacking of bitcoins a considerable task that not many computers are equipped to perform.
The transactions involving bitcoins are a little like normal bank transactions. A user is given two sets of keys to access this unique cryptocurrency and its form of finances. These keys are a long series of numbers and letters that are encrypted through a suitable mathematical algorithm. The public key acts like one’s bank account number that is given to other parties to receive and send bitcoins. The private key serves similarly to an ATM pin, which is used to provide authoritative access to the transaction. Since these keys are too long to just remember, users are advised to store them in encrypted offline storage devices or printed on physical paper that can be scanned later to access the important codes.
As of now, Bitcoin is not backed by any banks or governments. The value of Bitcoin as a commodity is also not recognized. It primarily functions as a mode of exchange that exists solely on decentralized networks. Finance pundits are generally divided in their opinions about the cryptocurrency. Some laud it as the future face of finance while others caution against its volatile valuations due to which every rise in its value is followed by an equally drastic decline. Despite such issues, the popularity of bitcoins continues to rise, with many exploiting its high exchange rate for lucrative investment ventures.
Aside from investment, bitcoins are now also used as a common form of crypto-currency that can be used for daily commercial transactions as its acceptance is gradually gaining traction. Many retailers, shop-owners, and businesses accept bitcoins as a legitimate form of payment along with traditional methods such as credit cards, debit cards, e-banking, etc.
Bitcoin has become the original front-runner of the crypto-currency field, and now many more forms of digitally encrypted currencies are following suit with growing numbers. These virtual currencies are together called Altcoins. The steady rise in popularity and acceptance of such currencies signal a future of digitally thriving marketplaces.
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