Why cryptocurrency so much popular among us

Sajjad Hussain
Feb 22 · 4 min read
Image for post
Image for post

The development of human civilization is inseparable from the transmission of information and value. The efficient information transmission and value transmission channel are like the beacon of the development of human civilization.

In the history of the development of information transmission, human beings have used words as the carrier of information transmission and the Internet as an efficient information transmission channel.

In the history of the development of value transmission, humans have used currency as the carrier of value transmission. The birth of blockchain technology is directly used as a channel for value transmission. Blockchain has transformed the development of communication technology from the transmission of information to the transmission of value.

With the development of blockchain technology, digital currencies based on blockchain technology have shown great potential in the field of international payments due to their decentralization and anonymity. Blockchain technology is continuously extending to digital currency, digital government affairs, supply chain finance, industrial Internet and other fields in the form of “blockchain+”. Among them, digital currency based on blockchain technology is due to decentralization and anonymity. And other characteristics, it has great potential in the field of international payment, and its point-to-point transmission mode can effectively improve current cross-border payment time-consuming and high cost issues.

Higher transaction fees

To take the letter of credit as an example, there are many items and the fees are not low, generally including notification fee, operation fee, courier fee, change fee, telegram fee and payment handling fee. Professional institution fees payment is another example, different institutions will charge different payment fees. Among them, the more widely used third-party payment institutions are mostly micro payments. Compared with letters of credit and wire transfers, their handling fees are lower, but they are still want to collect about 1‰ of the payment

Time and safety cannot be balanced

Among the existing international payment methods, payment methods such as letter of credit and wire transfer with higher remittance security have a longer remittance time, while third-party payment methods with faster remittance speed have lower security. For example, in the process of wire transfer, most transactions need to be concentrated in the bank network to complete the settlement, and the settlement of the letter of credit and the collection of payment also take a lot of time and cost. For third-party payment methods, the transaction throughput per second can reach millions, but there is not much credit protection, and the risk of remittance is also increased.

Higher payment risk

In the international payment process, not only the credit risk of payment, but also the security risk of the network, especially the losses caused by hacker attacks are difficult to avoid.

Advantages of cryptocurrency in international payments

Decentralized in nature

The cryptocurrency blockchain is not similar to a traditional single centralized node, but multiple decentralized nodes. This kind of node setting makes it extremely difficult to directly control the node through a centralized system. If you want to control or attack in a decentralized node, you must meet the conditions for double spend attack to modify the information on the blockchain.

Privacy and security

Take famous cryptocurrency Bitcoin as an example, In its decentralized nodes, users can create personal account wallets. Since there is no centralized institution, they can be used immediately without real-name authentication. In every financial transaction based on the blockchain network, both parties to the transaction and the content of the transaction are anonymous, and the mining node running the transaction is also anonymous, thus ensuring the privacy of users.

Transparent

Blockchain technology adopts distributed accounting. Due to the large number of participating nodes, each node records relevant transaction data, so the transaction data carried out in the blockchain network is difficult to be tampered with. At the same time, the blockchain network is transparent and easy to query for all users. Users only need to enter the block browser of the corresponding blockchain network to query any required transaction information, so the transparency of the blockchain is higher than all centralized Institutions.

Low transaction costs

In the blockchain network, the transaction fee is not calculated based on the total asset value, but the corresponding fee is calculated based on the cost of the miner’s accounting. The miner fee in the blockchain is based on the node cost, and the node cost is mainly the mining power cost, so the cost of each transaction is greatly reduced compared with centralized institutions.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store