What is cryptocurrency? What do you mean by the word ‘crypto’? All these questions arise when you hear something about cryptocurrencies. The answer to the questions is that ‘crypto’ or ‘crypto-currency’ is a type of currency in which tranfer of individual coins take place through a computerized system. It is secured with the help of cryptography and it is maintained by a decentralized body rather than by a centralised authority like bank or government.
Let’s take a look at the history and see how it all originated and who the pioneer was. It started when a person named Satoshi Nakamoto wanted a peer to peer online transaction system. He went through many failures while creating such a system keeping a centralised body for security. After that he made an online cash transaction system but this time he made it decentralized and there was no need of any government or bank to regulate it. The system works in a way such that both the parties have to agree on each and every transaction. If it does not happen so, the whole thing breaks down. This system was created back in 2008. At that time, cryptocurrencies did not have much value just slightly higher than some cents. Passing a few years, in 2017, the value of cryptos took a huge leap which was unbelievable. Some of the famous cryptocurrencies are Bitcoin, Litecoin, Ripple, Ethereum, and many more. Some merits of cryptocurrencies are :
- Ease of transaction
It takes less time for a transaction to take place in comparison to the traditional banking system. It is of great help when you need money urgently.
- Privacy and Security
The transactions are secured and it is very difficult for any third party to break through it. It is secured by blockchain using complex algorithms and is impenetrable.
- Decentralized system
It uses decentralized mode for transfer of funds which is the greatest benefit. The market cannot be now controlled by a particular group of wealthy people.
- Unaffected by inflation
Cryptocurrency does not have to face inflation as its value is based on pre-determined network codes. It cannot be changed by an individual’s will.
To conclude, cryptocurrency has proven their worth, and has shown that they can be operated in real world and thus many banks, retailers, investment firms, etc. have started accepting crypto as a legit form of payment. As the time passes, people will get more aware about this type of currencies and the market may get changed into a decentralized system.