Cryptocurrency is now the most valuable currency in the 21st century. It is not only the currency, it's also an investment like a share market. For these cases, the whole world pushes to think about cryptocurrency.
Many people know about the Cryptocurrency topic but most of them don't know how it works. Now in this world, currency is the main part of our daily lives.
Think about the first time of the buy and selling system.
In the cavemen lived, they used a barter system. But it has some problems, think about men needing some fruit but he has some fish. And who has fruits he doesn’t need fish he wants meat. This is a big problem in the barter system. Also, there is no common measure of value in this system.
After the problem was solved, the modern currency existed in 110BC. An official currency was minted. 1250 AD, gold-plated florins were introduced. And 1600 AD - 1900 AD paper currency gained widespread popularity and was used all over the world.
Now we use modern currency. Modern currency includes paper currency, coins, Credit cards, and digital wallets (for example online payment). All of this is controlled by banks or governments.
That centralizes the authority on how much currency you can use and send. Imagine the scenario of doing an online transaction. You go to a shopping mall to buy some products then send currency using a credit card. Although this transaction was successful, there are several ways this could have gone wrong. There could be a technical issue at the bank for example, the system could have been down, the machine could not work properly, and so on. That mine is the central point of failure. Also, the user account will be a hack or the transfer limits for the account were exceeded.
And that's why the future of currency lies with cryptocurrency. Imagine the transaction of two people in the future. One there has a Bitcoin app and there is a notification asking if you want to transfer 10 Bitcoins. If yes processing is started then authenticate users get authentication and check the recur balance they have made after that stance payment transferred completely. All of this happened in less than a minute. This intrum removes all the problems of purdon banking. There is no limit on how much currency you transfer. Their account can’t be a hack. And there is no central point of failure. As of 2021, there are more than 4000 cryptocurrency available. There are some popular ones like Bitcoin, Bitcoin Cash, Cosmos, Dogecoin, Ethereum etc.
So what is cryptocurrency?
Mainly cryptocurrency is a virtual currency that means it’s a medium of exchange. Cryptocurrency is quite similar to digital currency but it doesn’t have physical involvement. In cryptocurrency, there’s a limit to how many units can exist. In the Bitcoin set, this limit exists at 21 million. After this, no more Bitcoin will be produced. You can easily verify the transfer of funds in Bitcoin. Now there is an algorithm Bitcoin uses, it is very easy to determine if this transaction is valid or not.
What makes cryptocurrency so special?
Firstly there are no transaction costs. If you do any digital transaction you must lose some money. But in this cryptocurrency case, you don't have to lose any money. 24 hours you can access this money. There are no limits on purchases and withdrawals. Freedom for anyone can use. No Identification number and documentation are needed. Also, international transactions are faster and reliable. If you use a bank to transact this money it'll take 1 or 2 days to transfer. But cryptocurrency takes a few seconds or minutes.
What is crypto in cryptocurrency?
Cryptography is a method of using encryption and decryption to secure communication in presence of third parties. Cryptography uses two types of keys, one is a public key and another is a private key. Public key every one knows this number as the initial identity of the user. And the private key is the digital signature of the user which is always hidden.
Now let's talk about a normal transaction of bitcoin. First you have transaction details .This details who wants to send it to and how much bitcoin you want to send them. Then it’s part of the hashing algorithm. Bitcoin uses this algorithm. And next check the digital signature like a private key. After completing this translation one can change it again.
What is the future of cryptocurrency?
The whole world is clearly divided in cryptocurrency. Some people say cryptocurrency is better than regular currency. And someone says it increases criminal activity. It can be linked to terrorist attacks. However, futurists believe by 2030 cryptocurrency would occupy 25% of national currency. It means, cryptocurrency is increasing its customers. Now the whole world is pushed to think about cryptocurrency. So what is your thought about cryptocurrency? Tell me in the comment section below.