Blockchains are incredibly popular these days. But what is a
blockchain? How do they work, how can they be used and what problems do they
solve? As the name shows, blockchain is a chain of blocks that contain
information. This technique was originally described in 1991 by a group of
researchers and was originally intended to timestamp digital documents so that
it is not possible to tamper with them. However, it was mostly unused until it
was adapted by Satoshi Nakamoto in 2009 to create a digital cryptocurrency
bitcoin. Now the question is what is cryptocurrency? What does it mean? So this
article will take you from crypto noob to crypto genius and help you tell that
what it is, why it keeps becoming important, what you’ve invested in, and
unfortunately dark side of it. So let’s get started.
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Firstly cryptocurrency is 100% virtual. There is no silver, no
gold, and no paper money. It is just the transfer of digital assets managed by
a network of computers that uses cryptography to ensure whether transactions
are authentic or not. But what is all the fuss about why everyone is going
crypto crazy? Well, there are some distinct advantages to a currency system
like this: It is decentralized which means that while every transaction of
cryptocurrency is being recorded on the same ledger, there are many more copies
of that ledger, and anyone who is a part of that network has one. Secondly,
open traceable transactions. This means that how simple crypto is as the only
main thing required is internet access and most of the people around the world
have it. This allows you to make transactions by sitting at home and you don't
need banks anymore to make any sort of international payment. International
payments usually used to take half a day due to crypto being very instant now
with no sending limits.
Cryptocurrencies also have some issues which I'm going to get in
a bit but before that, you can hopefully see why some people are excited about
them and that brings me to the investments you’ve probably heard people
investing in cryptocurrency and all that means that they are exchanging dollars
to cryptocurrencies like bitcoin. They are hoping that those cryptocurrencies
become the next big thing and therefore suddenly shoot up in value at which
point they can then either spend them or exchange them back for more dollars
than they have bought them for.
Now important decision to make is in which cryptocurrency you
should invest because we have talked about bitcoin and bitcoin is just one out
of thousands of others cryptos having different properties for example
Ethereum. Ethereum is the second most invested in and can transfer transactions
even faster than bitcoin. Then there is Cardone which is technologically
superior. Here's litcoin which has a newer algorithm. You see you have plenty
of options so you have to be very careful.
Moving to the dark side, the main one is that people don’t take crypto seriously about
is volatility because these currencies are so new that they did not know about
their worth and so you find the cryptocurrency rate highly speculative.
Secondly, they are not accepted as a form of payment in well most places. Yes,
you can book a holiday with crypto or donate through crypto to Wikipedia but
there are a lot more companies that are not accepting bitcoin. Thirdly there is
a pretty strong sentiment that because there is no real policing on crypto
right now, it is like the best currency for criminals but to be honest I think
that data speaks for itself. That’s it for the cryptocurrencies. I hope you
find this article helpful.
This article is written by Midha Khan, one of the contributors at the School of Literature.
