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What Is Cryptocurrency And How Does It Works

Crypto Currency

Crypto currency is a decentralized digital currency or crypto currency. It allows users to securely and instantly What Is Cryptocurrency And How Does It Workstransfer a digital form of value to anyone and anywhere in the world without having to go through middleman like banks. Essentially it a digital form of money which can be said to innovation through email and text messaging which revolutionist the way to communicate with each other.

Bitcoin was the first crypto currency that have been released but now there are many more crypto currency in existence essentially it is a digital asset that used as a medium of exchange and it utilizes cryptography to secure transactions and control the creation of additional coins and to verify that funds were transferred. They operate on a secure and decentralized network where single party is responsible for the security of the network. So that means that the coins can’t be manipulated, most crypto currency works on block chain like bitcoin but there are some company that created their own technology like iota and ripple.

The first crypto currency was created back in 2009 by an unidentified individual name Satoshi Nakamoto. He designed bitcoin for maximum supply of 21 million coins that were unlocked through the process called mining. Currently there are 16 million bitcoins circulations so that still leaves 5 more million bitcoins to be mined. Once the last bitcoin is been mined there won’t be possible to create any more of them. The unique thing about bitcoin is that unlike the US dollars which is backed by the federal reserved. A bitcoin is only worth what the market is kept willing to pay for it. Currently one bitcoin is worth 8100 dollars which gives it a market capitalization of 137 billion dollars.

The bitcoin mining is the process through which the miners use software to verify and add transaction to a thing called the block chain. Which is the technology on what bitcoins operates on and that essentially is a public ledger. So, what this means that every bitcoins transaction that takes place is verified by all of the miners that are connected to the network and they are all in agreement that the transactions are legitimate. So individual miner dedicates their computer resources to the bitcoin network and they are required to put together recent bitcoins transaction into block chain. They also have to solve cryptographic “hash puzzles” to verify the transaction and once the miner successfully completes the puzzle their block is added to the block chain and they can claim their rewards which actually includes bitcoin itself and the transaction fees that are associated with the block that they verified. Once when all 21 million bitcoin are been mined the miners are no longer going to receive bitcoin as reward but they will still be eligible to receive the transaction that are related to the block they mined which is still going to give them incentive to continue operating the network.

The crypto currency network is not supported by any particular company. It is supported by individuals like you and me, here once incentive to be a miner is that they get that transaction fees and if they solve one of the puzzle they can unlock a bitcoin that is almost worth 8,000- 10,000 USD and that a great benefit to a miner. This created a surge in bitcoin mining operations to that extent that last year 36 terawatts of energy was us on bitcoin mining operations. But on the other side there also some drawbacks for bitcoin mining.

The bitcoin not traded on any exchanges in 2009 the first recorded price was 2010 and that was $0.39 per coin. The bitcoin price is measure against fair currency like USD, Euro, etc. It price determines on it demand and supply. The price started growing year by year and around 2014 it hit $ 1,242 per coin. From the birth the slop kept rising and last year around December 2017 it reached its highest peak which was recorded to be $ 19,205.11 per coin. Then it gradually started dropping and as if today the recent price of one bitcoin has almost dropped down to $ 6,500.

Ethereum:

Ethereum is consider as public and open source which based on block chain distributed computing platform and different operating features of smart contract. In crypto currency, ether is a source for their block chain is developed by platform of ethereum. Ether can be used a transfer link for computational performance between used to punished participant in mining nodes. Ethereum give turing, complete virtual decentralized machine, which help in generate scripts which use in public nodes of international network.  A transaction pricing mechanism us as internal “Gas” help to remove spam and in network, allocate resources. In 2014, development was performed on online crowdsale basis. System again set with 11.9 million coins kept for the crowdsale which is almost 13 percent of total circulatory supply. (blockgeeks, © 2018 Blockgeeks)

Litection:

Bit coin currency is made in 2009 by some unknown person. No middle man involves in the transactions.it use in hotel booking, purchase Xbox and shopping for furniture. Bit coin is help in purchasing any product anonymously. International payments are cheap and convenient because bitcoin not belong to any regulation of specific country. Small business mostly used it because of no card fee credit. Also used as investing point of view. It created for the process named mining as a reward. They can be easily changed with any currency, service or product. Research show that in 2017, more than 5.8 million users use crypto currency wallet due to its uniqueness and mostly include bit coin. (cnn, © 2016 Cable News Network)

Is it a bubble or not:

In the growing evidence, the future of bit coin in can be move in shadow because it consider highly wasteful in energy use point of view. More electricity utilized by new bit coin transactions and mining process of coins, so the long term usage of bit coin is not suitable for economy and for environment. But some people say that when the minds are going to change and every one want investment so a huge bubble burst happen. So it would be said that its time to sell when we talk about the future of cruptocurrency. Public opinion is going to be change related to crypto currency. With the passage of time opinion becomes more polarized. Bit coin is considered as black market currency. (Cellan-Jones, 27 November 2017)

Advantage and disadvantages:

Different benefits of digital currency are appearing. It is good for different buyers and business. If a specific crypto is going to purchase at low price than you purchase in pennies instead dollars. It pays off in long term. Some benefits of bit coin are given as under: quick and easy payment, easy access, fast settlement, private, highly secured, lower fees, identity theft, remains unknown, no third party, facilitate international trade and no charge-back. Also have some disadvantages like lack of knowledge, can lose your wallet, uncertainty and volatility, difficult to understand, not accept widely and scaling. (CoinPupil, November 5, 2017)

Crypto currency has not a major drawback but with passage of time and slowly it make its position strong. Every country regulating and legally used crypto currency in different ways.

Conclusion:

After all above discussion, we conclude that crypto currency or bit coins are very useful too for transferring money with involvement of any third party. Different type of positive and negative aspects can be clearly present but still bit coin can strong its position when its usage at international level increase and it can be use with proper regulation and law.  But still it used in different business and also in sale purchase of products. No additional charges attract the user and they maximum use this currency to save additional money.

References:
  • blockgeeks. (© 2018 Blockgeeks). What is Ethereum.
  • Cellan-Jones, R. (27 November 2017). Bitcoin – risky bubble or the future.
  • cnn. (© 2016 Cable News Network). What is Bitcoin?
  • CoinPupil. (November 5, 2017). ADVANTAGES AND DISADVANTAGES OF CRYPTOCURRENCY.

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