Why Cryptocurrency has a better future than we think Secrets You Never Knew
Cryptocurrencies have been in the news so much lately and not in a very positive way. One major reason for this is their wild gyrations in value. Taking a look at Bitcoin, for example, it surged from a fringe investment and became a global sensation. In 2017 mid-November, the price was $3000 for one Bitcoin. On 6th December, the coin surpassed the $19000 mark, and in January, the price was hovering around 15000 dollars. The coin is having a moment despite most people thinking it’s a scam or a bubble that is about to burst. There are not so many people who trust the cryptocurrencies world and this fear is bringing huge uncertainties in the market. It’s one of the reasons most people are asking, is there any future in the cryptocurrencies?
Cryptocurrency is slowly changing the finance world and its future. As opposed to most people, the impact the cryptocurrencies have can’t just be ignored. The only thing that is not clear is how the technology behind the cryptocurrencies will alter the national and global financial systems. For digital currencies to be entirely relevant for everyone in the future, it’s a high time that someone explained cryptocurrency to us in a language that can actually be understood not all the tech jargon.
Let’s move on to the cool stuff. What is blockchain?
Blockchain is a global online database that can be accessed and used by anyone with an internet connection regardless of their location. The amazing thing about this is that central authorities own traditional databases like banks, governments, and companies, but blockchain isn’t owned by anyone. This is one of the many reasons why the future of cryptocurrencies is shining bright. There are no paid rights to access the database, and there are no limits as long as you have a good internet connection.
Instead of happening through banks, cryptocurrency transactions happen between individuals instead of the bank. The reason for this is trust in the finance world. People use banks because trust has diminished from the finance world. There have been countless issues where people send money expecting the person on the other end to honor their promise of delivering goods or services only to be scammed. So many people have lost their money and end up on the other end wishing they used the bank or any other way that would have been safe. If you look at cryptocurrency transactions, this is one bridge they are trying to build and have done so successfully. You can know the person you are transacting with and if they can be trusted. When you send funds stored in your crypto wallet, the transaction is recorded on the blockchain which is a digital ledger.
Imagine you want to send someone cash to buy a house. You need to trust all the people involved in this transaction, the central bank, local bank, lawyers and so forth. This is very okay but all these people are humans, and your deal can go sideways very quickly. The details of your transaction can be shared with unfriendly parties exposing you. In every step to complete this transaction in dollars, there is a cost meaning inflation is introduced into the system.
If the transaction was to happen using Bitcoin or any other cryptocurrency, only enough miners need to approve that the transaction is valid. Even if a few of the miners are not trustworthy, a good number of them are honest meaning the transaction is legit.
The primary reason why cryptocurrencies exist is to avoid borders, governments, extra transaction costs and middlemen as well as having high security and avoiding forgery.
According to some people, cryptocurrencies will eventually become worthless. The reason cited for this is that Cryptocurrencies are virtual currencies not backed by anything real like gold or other physical commodities, but then neither is the dollar and other modern currencies. Currencies are just pieces of paper intrinsically worthless, and they are recognized because payments with money are more manageable as compared to barter trade. With money, you just need to find someone who can pay you with the paper and use the paper to buy yourself dinner. Money becomes an acceptable medium of exchange only because of the trust that the piece of paper is worth something to another person.
As a result, the price of particular crypto fluctuates if news break that specific vendors or firms are accepting the crypto as a form of currency.
The cryptocurrency market isn’t on the verge of collapse, but it’s overcoming its growing pains to try and mature into a substantial investment as well as a solid medium of exchange with strong financial underpinnings. For those who are willing to stay on course, cryptocurrencies are the future of payments.
Muhammad aziz
