CRYPTOCURRENCY

Well, it could as well be called the virtual currency. The first ever type of currency that is not in any physical form until it is converted to local currencies. We are talking about the cryptocurrency era. Most organisations have implemented this as one of their payment methods and we are left wondering what do they mean by payment using bitcoin or ripple is accepted. For the few who also understand what they mean by payment using this type of currency, we are still left not knowing what exactly cryptocurrency is and how it came into existence. Cryptocurrency has stirred up so much interest among people especially with the on set of the ransomware that attacked computers and encrypted all files and to have the files decrypted one had to send some sought of ransom in form of bitcoins to have their pc’s working. So what exactly is cryptocurrency and how did it come into existence?

What is Cryptocurrency

Cryptocurrency is a ‘virtual’ monetary unit that is used as a medium of exchange online working similar to how the other types of currencies are used as medium of exchange. The difference between the other monetary units and the cryptocurrency is that; for cryptocurrency, it uses cryptography which is a network security measure used to secure transactions that take place.

The Dawn of Cryptocurrency

Cryptocurrency came into existence when it was invented by Satoshi Nakamoto. His main aim of inventing it was to create a peer-to-peer cash system whereby payments can be done directly between the sender and the receiver without need of a financial institution.

How Cryptocurrency Works

Cryptocurrency works  by using the network peers. Once a transaction is made, the transaction file is signed digitally using the sender’s public key and sender signs the hash of the previous key and public key of the person receiving the currency and this information is attached to the end of the coin. A broadcast is then sent to all the peers within the network before undergoing validation. Due to lack of third part financial institutions, the network of nodes consisting of data miners validate the transaction using algorithms and once the transaction is validated it joins other transactions to form a block-chain. The transactions on the block-chain cannot therefore be altered by anyone.

Properties of Cryptocurrency Transactions

Fast: This is the fastest monetary transaction unit as it takes a matter of few minutes to send and receive the currency online, as it uses a global system to perform its operations.

Secure: It is the most secure transaction, despite all fears concerning online transactions. It is the safest because it uses cryptography to secure the transactions.

Irreversible: Once a transaction has been validated at the network of nodes by the miners, the transaction cannot be reversed back to the sender. Therefore, everyone needs to be extra careful when performing this transactions. Who would want to lose their money?

Availability: Cryptocurrency is available for use by everyone. It does not require any permissions to be used.

Anonymous: Use of cryptocurrency makes transactions anonymous hence the sender nor the receiver cannot be traced.

Now we are left with the question what types of cryptocurrencies are available in the market today?

Types of Cryptocurrency in the Market

The following are the cryptocurrencies available in the market today:

• Bitcoin- This was the first cryptocurrency.
• Auroracoin
• Ripple
• Peercoin
• Freicoin
• Litecoin
• Mastercoin
• Namecoin
• Nxt
• Primecoin
• Quarkcoin
• Dogecoin

Benefits of Cryptocurrency

 

1. Reduction in transaction fees.
2. Secure therefore, prevents fraud.
3. Availability giving access to everyone.
4. Reduction in identity theft.
5. They are recognised at a universal level.
6. Promotes faster settlement due to lack of delays by third-parties.

Cryptocurrencies are growing rapidly fast and its future is bright. They are being accepted as payment methods in different institutions such as education sectors, organisations like Google.This clearly shows that the cryptocurrency is here to stay and to grow. Recently bitcoin and ripple increased in value. Therefore, lets all take advantage of its early stages and invest in cryptocurrency trading. You never know where your luck falls till you try.