Cryptocurrency- What You Need To Know
Cryptos, Cryptocurrency, Cryptocurrencies or Crypto-assets… whichever?
The Wikipedia terms a cryptocurrency as a digital asset that is designed to work as a medium of exchange.
A Cryptocurrency can do what regular cash would do, in case of meeting your daily needs.
The rise existence and growth of cryptocurrency relies heavily on the concept of cryptography.
That majorly facilitates cryptocurrency mining, security, and verification of transfers of units.
The (Distributed Ledger)Blockchain Technology
The Blockchain is the core technology that provides a framework for all the Digital Assets.
It’s is, therefore, a very core basis of the rise and expansion of the entire Crypto-sphere.
Since the launch of Bitcoin(As the initial manifestation of a real application of the Blockchain).
Many other Cryptocurrencies emerged(The Altcoins).
Further to that also is the rise in very disruptive applications based on the Blockchain itself.
The applications will be at the center of crucial industries like Fin-tech, Healthcare, Banking, Supply chains, marketing, sports, and gaming.
Virtually, the Blockchain applies to a majority of the applications that we see around today.
Since its a public ledger, all users and developers can access it.
Regarding careers, new avenues are coming up every day.
There is a different crop of Developers who are right now very highly sought after… they are smart contract programmers.
Note that smart contracts are another vast field in applications.
Simply explained, smart contracts are agreements or contracts in form computer codes.
The codes are set with validity checks and are self-executing following a pre-set criteria.
The world of smart contracts will significantly reduce the need for physical lawyers and create the demand for smart contract developers.
The modern lawyer will be superpositioned if they can merge the formal training with the Blockchain and the smart contracting arenas.
Cryptography in Cryptocurrency
Cryptography, also Cryptology from Greek refers to a hidden secret.
It is the practice and study of techniques for secure communication in the presence of third parties called adversaries.
Cryptocurrencies are classified as a subset of digital currencies.
The digital currencies are also a subset of alternative currencies and virtual currencies.
When we talk about Cryptocurrencies in the world, it is synonymous with Cryptography.
The inception of Bitcoin and After
Bitcoin launched in 2009, and it proved beyond reasonable doubt of what the Blockchain can attain. Now, fast forward to date(2018), we have numerous coins and tokens.
Conceptually, each coin or token starts with white paper.
That is more of the strategic plan, with the problem statements and objectives therein.
The Rise of Altcoins in Cryptocurrency
Since then, numerous cryptocurrencies have emerged with Bitcoin leading that list. Other cryptos came after Bitcoin’s launch.
Those are the Altcoins.
Bitcoin and its derivatives use decentralized control (The Blockchain) as opposed to centralized electronic money/centralized banking systems.
The decentralized control system is a significant plus for cryptocurrency users across the globe.
Users of Cryptocurrency( traders and developers) have the entire globe to do business.
Government control and or geographical locations are never an obstacle in the Crypto-sphere trades.
The internet connects all nodes on a peer to peer network topology.
The network also relies heavily on the Blockchain, which is a public ledger for all cryptocurrencies.
It is locatin is on nodes and wallets.
The Future of Cryptocurrency
Cryptocurrencies are gaining both in populace and acceptance across the globe.
On the downside, their future has a handful of landmines to navigate.
That is starting with the massive lack of knowledge and acceptance by users.
These are part of the hurdles that Cryptocurrencies must address if they are to compete adequately with the traditional currencies.
Some countries have relaxed the stance on Cryptocurrencies, and the list is growing.
Canada, Japan Australia, France, Italy, Netherlands, and the United States partially across the states.
That has led to the clearing of the air around publicly accepting Bitcoins and even making clear taxation laws for it.
These are Key notes that the
needs to address:
- Inflation – This remains hazy for all central banks across the globe.
How do we attribute annual economic inflation percentage with cryptocurrencies as the main base of an entire national economy?
It’s a whole novel by itself, and the cryptocurrency bubble has some distance to cover in time.
- A measure of value-Central banks being the primary controllers of the national economies, fall short here.
Not only do cryptocurrencies make it hard for controlling the amount of cash and cash equivalents within the populace (cryptocurrencies).
But how to drive the economy with them is just a bunch of nuts.
Take Bitcoin, for instance, Being a decentralized currency limits central accountability regarding transaction volume and time
- General acceptance-This poses the primary challenge as cryptocurrencies are not generally acceptable as a form of payment. (Not at the moment but this is fast changing).
For instance, in Kenya, the Central Bank does not recognize the transfer of Bitcoins as a settlement of payments.
The basis for that it can’t guarantee the safety of that transactions.
In conclusion, Bitcoins and the Crypto-sphere entirely offer an excellent form of cashless payment.
However not until the economies find solutions to the above three noted hurdles.
( and others not listed), Cryptocurrencies will remain more of the commodity market alternative.
That is opposed to solving our daily cash needs as regular cash does.
As we get into the future, more of this will change. The world may unanimously adopt cryptocurrency for payments.
We are yet to get there.
Any comments, please share below.
Thanks for reading!