Cryptocurrency is sort of a digital asset or a virtual currency that serves as a mean of exchange of assets and establishes sound financial transactions. They are alternatives of a currency and considered to be a digital currency worldwide. Cryptocurrency transactions are secured through strong cryptography. One of the most striking features of a cryptocurrency is that there is no central authority controlling its issuance and regulation. It is completely decentralized and mainly works through the technology of a distributed ledger i.e. digital data is shared and reproduced in different geographical areas with mutual consensus and then it is rolled out in multiple countries, institutions or on another cryptocurrency site. In Cryptocurrency terms, a blockchain verifies the authenticity of crypotcurrency coins and the process of mining validates the transactions. Cryptocurrency always meets the following criterion;
  • A shared authority maintained through mutual consensus.
  • A single system maintaining data of all the units and its owners.
  • Cryptography that proves ownership of the cryptocurrency units.
  • Exchange of individual cryptographic units that allow cryptocurrency transactions.

Purpose of Cryptocurrency

Mainly cryptocurrency allows digital currency transactions between peers without the intervention of a third party influence or fraud or any other constraints. An individual’s cryptocurrency units are fully secure online and can be used for exchange of pricey assets in countries that have given legal status to cryptocurrency. The virtual assets that one buys or exchanges online keep on increasing in value overtime. Sometimes cryptocurrency is also compared to gold in value like when you buy gold and save it, its’ worth keeps on escalating with passing years. Same goes for the cryptocurrency, you buy the coins/ units, save them and overtime their worth multiplies in numbers.

How it Works?

One might think that cryptocurrency is highly technological and complicated. A common man neither can understand it nor has anything to do with it but let us decode for you how cryptocurrency exchange works.
Whenever a transaction is requested, the request is forwarded to a system of computers known as nodes. Algorithms are applied by nodes to verify the transaction and the user account and status. When the transaction is verified, it is piled up with other transactions and a larger block of data is shared with mutual consensus. The blockchain of information is everlasting and unchangeable. After the verification and the creation of blockchain, the transaction is complete.

History of Cryptocurency

Back in 1983, a man named David Chaum who was an American cryptographer, for the first time received electronic money that was named ‘ecash’. Then after development of an electronic platform for payment involving cryptography namely ‘Digicash’ was developed, David Chaum implied money exchange via it. Digicash made digital currency exchange undiscoverable by the government, banks or the third party.
In 1998, an electronic cash system was introduced by Wei Dai named ‘B Money’. Sometime later another electronic currency called Bit Gold was introduced by Nick Szabo. In 2009, the first decentralized cryptocurrency, Bitcoin came into existence. Followed by Bitcoin, another cryptocurrency Namecoin was created in April 2011. Namecoin was developed with the motive to make internet tracking nearly impossible. In October 2011, Litecoin was started for cryptocurrency exchange followed by Peercoin.
Legality of Cryptocurrency
At the moment, Cryptocurrency exchange is legal in United States, Canada, Russia and Thailand whereas it is completely banned in United Arab Emirates, Egypt, Pakistan, Algeria, Iraq, Morrocco, Nepal and Bolivia. An implied ban on cryptocurrency is imposed in Qatar, Oman, Saudi Arabia, Taiwan, Lisotho, Lithuania, Macau, Iran, Kuwait, Colombia, Indonesia, China, Dominican Republic, Bahrain and Bangladesh.

Types of Cryptocurrencies

  • Bitcoin, the first ever cryptocurrency and most famous one as well. It is leading the cryptocurrency industry where its value is tied to the gold standards. The worth of Bitcoin has crossed 700 Dollars and has around 200,000 transactions on daily basis.
  • Ethereum, created by Vitalik Buterin ranks second in cryptocurrencies. Ethereum also hosts many tokens like Augur and DigixDAO.
  • Ripple, a comparatively less popular cryptocurrency that is more preferred and adopted by banks.
  • Litecoin, successor to bitcoin, is compared to silver in the cryptocurrency market.
  • Monero, a more improved and privacy protected version of Bitcoin.
Another famous cryptocurrencies are Ethereum Classic, Dash, Augur, NEM and Waves.

Benefits of Cryptocurrency

Cryptocurrency helps you in the following ways;
  • Since cryptocurrencies are entirely digital, there is no chance of fraud or tempering with data.
  • The cryptocurrency database is large and completely free of third party intervention.
  • There is no transaction fee for cryptocurrency until and unless third party is involved.
  • The chances of identity theft in a cryptocurrency exchange are minimal.
  • It is accessible by almost 2.2 billion people in the world.
  • It has recognition on an international level.
Cryptocurrency has taken the western world by storm. It is an advanced and extremely secure digital currency. People who love to make investments should consider purchasing this new sort of asset as well.  



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