Many people are getting confused these days with the new buzzwords "Cryptocurrency, bitcoin, Blockchain and others". We will try to help on these new words.
Evolution of Cryptocurrency
Crypto Currency, which is, not own or govern by any government body is the best description for me as cryptocurrency and all the confidential information is store in junk words (which is crypto information about the user). Creator of the Crypto currency Bitcoin (Via White paper) is unknown person “Santoshi Nakamato” and he live in japan however no one have any proof whether this information is correct or not.
How Cryptocurrency works
Firstly, Crypto Currency does not need to provide your actual identity instead, you just need Wallet (crypto address), which mean even your pets can own cryptocurrency or future ready robots can also own and pay you to work for them. Just kidding.
If you want to perform any activity on cryptocurrency then you need to create your wallet and it will create private key, which you need to store it until today we have no ways of getting back your private key.
How it is different from normal currency and why all the government have objection on it
Whenever we want to perform any digital transaction with our own money, we visit any nearby bank and provide the proof that we are the same person what we are claiming it and if the entire document provided is valid as per the bank process then we will provided with credential and bank account (Crypto world we called it wallet). We will add the Receiver; they will also need to perform the same validation process (more or less sometime). Now, you are ready to transfer the money.
Cryptocurrency is different from normal Currency
Normal Currency, we received it on performing any task or service, Cryptocurrency can also receive on doing any jobs or you can buy it from the listed exchange provided in your country. This process is same as if you have to travel some other country then you convert your local currency to the country you are travelling to.
Whether Cryptocurrency is commodities
Yes, you can keep the cryptocurrency with you as gold, silver as they can used as commodities and based on market demand and future scope it will be increase or decrease.
Why Cryptocurrency have so high values
Bitcoin, Ethereum and other cryptocurrency have so high values due to following reason
- Bitcoin or Ethereum has limited count and they will never cross those limit
- Blockchain Architecture is getting heavily use for next generation application (ICO) and this company are getting listed with their own token (Company Share) with pledge value linked to bitcoin or Ethereum or similar crypto currency
- Now, Lots of existing business are starting to accepted this currency for payment mode