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Bitcoin: What you need to know about Cryptocurrency

One of the hottest trends in the world now is Crptocurrency and it’s growing fast doubling with the rate of customer signups.

Let’s explain Crptocurrency. It is a unique digital currency that evolved in this digital era, which uses elements of mathematical theory and computer science, to secure information and communication online.

Here are crptocurrency terms to be familiar with.

Transaction: the transfer of funds between two digital wallets submitted in a public ledger to await for confirmation.

Public Ledgers: this is where all confirmed transactions are stored.

Mining: the process of confirming your transactions and adding them to a public ledger. Anyone can perform a cryptocurrency transaction and add the transaction to a public ledger but to add a transaction to the ledger, a miner in crptocurrency solves a kind of mathematical puzzle.

However, businesses and people are beginning to accept crptocurrency as a currency although it is risky for business because of its price fluctuations however, there are benefits and reasons to accept it.

It is decentralized i.e. no single institution controls its network. They are not based in a single country and a central authority can’t cause its meltdown or decide to take people’s currency away. If some part of the network goes offline, money keeps moving and anyone can pay anyone anywhere without the need to convert the currency. If a business works with lots of oversees customers also, using crptocurrency may reduce the fee of converting currency from one country to another because its currency is “Global”.

Owners of crptocurrency can keep their digital coins in an encrypted digital wallet and the connection between you and your coin is anonymous because transactions are open to the public.

Crptocurrency is cheap to use, fast and secure. You can easily set it up without a fee in seconds and whenever you send money, it will arrive minutes later as soon as network processes the payment.

It also has an overall lower fees funding sources i.e. the currency is just like cash because when sending or accepting crptocurrency, no transaction fee is attached.

Some cryprocurrencies have emerged over the years and among them are:

Bitcoin: the first crptocurrency to capture public’s imagination, is a secure payment and storing of money that doesn’t require people’s names/banks. Bitcoin is created and held electronically and can be used to buy things just like naira, euro, dollars etc. Created by a community of people that anyone can join, Bitcoins are mined using computing power in a distributed network.

Ethereum: this crptocurrency was originally designed to be a platform. Not all coins are in the hands of early miners with Ethereum.

Litecoin: much faster to transact and uses “Scrypt” as a proof of work, which can be decoded by the help of CPUs of consumers grade.

Do Crptocurrencies have value?

It is true that money is effective when it has value. However, Crptocurrencies are only worth as much as everyone deems them to be worth.

Although, crptocurrencies haven’t seen widespread adoption yet and investing in them may be risky. But, they are no doubt an interesting technological trend the future may transact in if they can be completely secured.

 

Written by Busayo Tomoh

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