Cryptocurrency is a digital currency platform, which uses encryption techniques and builds today’s generation of a digital asset. Cryptocurrency is designed to work as a medium of exchange; it secures financial transactions with the help of well-built cryptography method, it also verifies every transfer of funds which operates independently of a central bank.
Cryptocurrency is known as a form of digital currency, virtual currency or alternative currency. Bitcoin, generally known as the first decentralized cryptocurrency; released its first open-source software in 2009. Since then, over 4,000 alternative coins of bitcoin has been created.
Cryptocurrencies do not use a centralized control. The decentralization control of every cryptocurrency is maintained through distributed ledger methods knowa n as blockchain, which works as a public financial transaction database which stores all information of transactions made.
In March 2018, the word “cryptocurrency” was added to the Merriam-Webster Dictionary.
According to Jan Lansky, a cryptocurrency meets following six conditions:
- The system followed by cryptocurrency does not require a central authority, works in a distributed ledger methods.
- The system keeps a record of every transaction made in cryptocurrency and also their owners.
- The system identifies whether new cryptocurrency units can be created. If yes, then the system defines the circumstances of their origin and how to find the ownership of these new units.
- Ownership of cryptocurrency units is been followed by a strong cryptographical method.
- The system allows exchange and transactions by checking the ownership of the cryptographic units and changed units. A transaction statement can only be approved by verifying the current owners of these units.
- For changing the ownership, if you simultaneously entered two different instructions of the same cryptographic units, the system will initialize only one of them.
Why is cryptocurrency used?
- You can easily transfer low cost money. By using cryptocurrency, you can send and receive payments at very low cost with high speed. For example, a person who had a transaction of $99 million litecoin (LTC), it took two and a half minutes to process and it also cost only $0.40 in transaction fee for the sender.
- Cryptocurrency is very user friendly and can be easily accessible by anybody.
- Always think as Cryptocurrency as a second source of your money also as an alternative store of wealth.
- If you want to build a startup, you can get a lot of beneficial from cryptocurrency.
- You can transfer a large amount of money without explaining to the bank.
- You might also get paid in form of cryptocurrency, if you started posting contents in a social media and blogging platform Steemit.
- You can also rent your leftover hard drive space to cloud with the help of a decentralized block chain cloud storage solutions such as Storj.
- You can travel whole over the world by spending cryptocurrency.
Few travel agents accept Bitcoin as a payment option for booking hotels, flights, and car rentals. The travelers can convert their cryptocurrency into local currency of almost all major countries in this world.