What is Cryptocurrency?
In today's money market, attention has been taken off banks and other financial institutions. We can send and receive money from any part of the globe with several transfer options. Even better, the idea of digital money created a global blast in economic innovations. With establishments like BitForex taking the front row in making cryptocurrency accessible to all, everyone now has access to virtual currencies.
For years now, we've welcomed the idea that money can be spent without exchanging physical notes. However, the cryptocurrency did not only buttress that fact, its creation ruled out the need for financial institutions as the middlemen in transactions. Without further ado, let's get into the definition of cryptocurrency, how digital currency works, a few common cryptocurrencies, and why have one today.
Definition of Cryptocurrency
A cryptocurrency is any digital currency used in exchange for goods and services, but most importantly secured by cryptography. All or most cryptocurrencies have their decentralized networks linked to the blockchain technology. Cryptocurrencies are considered the most secure form of currency exchange because the cryptography prevents all counterfeit and double-spending measures.
The term 'cryptocurrency' is an alias for the security encryption techniques used in protecting the network from fraudulent activities. Digital currencies are mostly running on the Blockchain network, which coordinates and ensures the security of transactional data.
Since the inception of digital currency innovation, several financial experts have pointed out the flaws and possible damage it may attract. They actively insisted that the Blockchain network could cripple investments of several industries, law, and finance. Nonetheless, this level of criticism has only helped the network and currencies grow stronger yearly.
These accusations which included payment for illegal transactions, the vulnerability of business data, and volatility in exchange rate discouraged people from engaging at first. However, unexpected interest in cryptocurrency shown by the people wowed the globe. It became clear that cryptocurrencies offered transparency, portability, and also created inflation resistance among its network.
How Cryptocurrency Works
Cryptocurrencies fully operate using secured online tokens which are organized and represented by LEIS (Ledgers Entries Internal Systems). Several algorithms and cryptographic encryption are responsible for the millions of chain networks created daily by its users.
These virtual currencies are encrypted to protect the blockchain community from intruders looking to access individuals funds. The cryptography encryption creates integrity for these virtual currencies. As it allows individuals to make unlimited transactions of varying amounts daily.
Fractions of cryptocurrencies are generated through Mining, which simply involves utilizing the computer's power for token creation. Not many people have the time and resources to mine cryptocurrencies. As it consumes a lot of power and requires certain expensive mining gadgets. For public access, cryptocurrencies are always made available for purchase from brokers. These currencies are then saved and secured in cryptography-secured wallets until needed.
The use of cryptocurrency and blockchain technology has been vastly included in the financial monuments of countries across the globe. More of this acceptance and application should be expected in the coming years. It should be expected that financial assets like stocks and bonds be exchanged for the blockchain network.
The Most Common Cryptocurrencies
In accepting this new financial innovation, there are now thousands of cryptocurrencies since its inception. These currencies vary in amounts and a few changes in their transaction policies. Nonetheless, they all serve the goal of unlimited financial freedom. Let's read through some of the common cryptocurrencies available for grabs.
Developed by the infamous Satoshi Nakamoto, Bitcoin was the first virtual currency that dared to break the restrictions created by financial institutions. As the most commonly traded cryptocurrency to date, Bitcoin has a market capitalization of above $127bn as of April 2018. The cryptocurrency now tops the chart as the world's leading accepted digital currency. With an equivalent of over millions in dollars exchanged between users every minute.
The Ethereum blockchain has its leading currency 'Ether' globally known as the second common and valuable digital currency. Developed in 2015, this Ethereum blockchain currency estimated market value of $55.9bn as of April 2018. Staying strong after the turbulent journey and setback it faced a few months after development.
In 2016, the Ether digital currency faced a financially crippling cyber hack which led to the splitting of the currency. From a thriving market value as high as $1,200 at some point, the Ether dropped drastically to struggling between 9-10cents. Because of the major bounce back the Ether currency had in 2017, other digital currencies in the Ethereum blockchain launched following its success.
Also a thriving distributed ledger system, the Ripple was developed long before the Ethereum in 2012. But faced major lawsuits and financial critics that slowed down its growth and validity for years. Following those years was the emergence of a distributed ledger system that tracks multiple transactions; not restricted to cryptocurrencies. Its parent company has partnered with leading financial institutions like Santander to ensure this financial entity meets the expected standards. As of April 2018, the Ripple had a market value of roughly $23.78bn.
Popularly known for so many similarities as the Bitcoin. Litecoin is a virtual currency that has grown vastly and quicker into developing modern innovations. These innovations include swift payment transactions and processing and increased transaction limits for every wallet. As of April 2018, the Litecoin was known to have a sum market value of $6bn.
Why Use Cryptocurrency?
For those wondering why there's a need to switch from the traditional mode of payment and online transactions, read this quickly.
Secured: Cryptocurrencies are the most secure forms of executing financial transactions in the world. The time, amount, and place of exchange is a piece of information only accessed by parties in the transactions.
Decentralized: Available to anyone.
Offers Anonymity: Your details are not requested by brokers, and so they are safe from third-party intruders or hacking.
Zero Counterfeit & Reverse Policies: There's zero room for counterfeit complaint, as the tokens are mined and authorized by the blockchain technology before purchase. Also, reserve funds can only be made by the recipient if the need arises.
BitForex is an exchange service platform that can be classified as one of the Top 10 cryptocurrency exchange services. It is focused on providing millions of users with a digital currency trading and investment tool that is not only safe but also professional and convenient. BitForex has a high customer-oriented culture and state-of-the-art financial technology.
BitForex is programmed in a way that it can quickly adapt to the changes of the Crypto market while introducing new features like margin trading, enhanced trading charts, derivatives, and a host of others. The headquarter of BitForex is located in Hong Kong, while there are branch offices in countries like the United States, South Korea, and Singapore.