What is cryptocurrency and why are people talking about it?
Cryptocurrency is a digital version of money that is used in various ways to create value and/or to fulfill a particular purpose. Currencies are secured in a cryptographic manner creating cryptocurrencies that cannot be double spent or duplicated. Most cryptocurrencies have a blockchain that monitors and verify transactions through many different methods for proof that the network is viable.
Bitcoin is the most popular cryptocurrency and it’s blockchain is a Proof of work (PoW) consensus in which an “Operator" proves to the “Verifiers" that a specific amount of computational effort has been put forth.
Crytocurrency is getting more popular by the day but many new retail investors are unsure whether this new market is a scam. To understand crypto you need to understand their use cases. Lets use the cryptocurrency “XRP” for example. Xrp is an interoperable cryptocurrency that acts as a bridge between international currencies, meaning that it can be traded for any other currency in the world. Ripple Labs created Xrp and the currencies native blockchain (XRP Ledger) in 2012. Sending money to someone on the other side of the world just got a lot faster and cheaper on both ends.
These particular cryptocurrencies are also traded on the open market or crypto exchanges such as Coinbase and Binance. So when traders are buying, someone else is also selling. Companies find value in these cryptocurrencies by utilizing it’s technology to increase scalability of their network. Some traders are good at reading charts and know how to quickly get in and out of a trade that can make profits with cryptocurrencies. There is always risk involved in trading so be sure to get guidance from a licensed professional before investing major capitol.
In the world of Cryptocurrencies, decentralized networks are a key component to why people trust to invest in projects with the understanding that they are truly a part of building this network. Knowing that a large of entity does not control the price of these digital assets give investors the confidence they need to start investing. Most crypto projects are decentralized and rely on decision making by community vote. When a company builds a decentralized network or blockchain, they are essentially releasing the network to the public so that anyone can use the technology.
A great example here is the Ethereum blockchain built by Vitalek Buterin. The blockchain has a built in code called the Ethereum Virtual Machine. This allow users of the Ethereum blockchain to create what is called “smart contracts.”
These contracts can be used to create a huge problem solving technology that involves a cryptocurrency as the governance tool for operating the system.
The ability to create a smart contract that has a contract agreement embedded in the code will change almost every aspect of contract agreements around the world. Imagine the headache for major corporations in 'tracking supply chains or the time it takes to fill out paperwork after buying a house. This new and decentralized way of creating agreements between parties is an incredible way operate and scale any business model that involves contract agreement.
Since 2017 many major companies have been adopting crypto publicly and under the radar. Many new influencers have surfaced in the entertainment industry, including Elon Musk. In late March 2021, Elon Musk announced that Tesla will be accepting Bitcoin as payment for their product. Other companies like Square and Microstrategy have also been adopting Bitcoin over the past few years, and they seem to be very bullish. There are also rumors of the world’s largest multinational investment management corporation, BlackRock has begin to dabble in Bitcoin. Mass adoption of crypto is on the brinks while retail investors and institutions await regulations that will allow a level playing field for all good actors.
Learn How to Make a Coinbase Account, Like & Subscribe to Learn more about Intercoin.
