One thing which has struck the imagination of all, and fear for many in the financial world today is like accepting the existence of mermaids in the 21st century, and you would have guessed it right, is it money, is it a transaction or is it the future of currency system? Enter into the world of digital cash, a cryptocurrency which is a phenomenon no less discussed than warmer topics like global warming, space junk and the rest.
It would be hard to accept that traditional banks are in for rolling out a white paper on the cryptocurrency, blockchain project and even acknowledge it as a mode of payment for the services. With so much of noise going around this form of digital currency whether to accept it mainstream, or still be cautious, many fail to understand the concept of Cryptocurrency.
What is Cryptocurrency?
It will be surprising to know that Cryptocurrency is actually an incidental product which was not meant to be discovered, it was the when the inventor of Bitcoin who till date is unknown wanted a peer to peer digital cash system to be introduced to the world to avoid double spending.
- no central authority is there to monitor the digital currency
- It is a trust-based system which can be easily transferred, bought and sold.
- transactions, accounting are all a part of it, there can be no double spending as a central server keeps track of all the transactions before with the currency
- is it out there on a public database where one can transfer it to their bank accounts and take liquid cash
- however there are limited entries to cryptocurrency in the database and it cannot be forever changed without fulfilling specific conditions
How does it work?
With all said and done, how the whole process works out in the digital space is extremely technical and the basic technology used is p2p, which is used for transacting using a public key or password to access the digital account of the user and continue any particular transaction. As a medium of exchange, it has been created to store transactions electronically using encryption techniques which are verified at every stage before the currency is transferred, the bitcoin was the first digital currency to be released and there are many which have since then been developed and widely used. Keeping in mind the confirmation of any digital transaction which is only complete is a critical aspect in cryptocurrencies, once confirmed cannot be erased or reversed.