Cryptocurrency is a digital currency that uses cryptography for better security and provides anonymity
for users. It is purely digital, without any physical coins or notes.
Cryptocurrency uses blockchain technology to store an online ledger of all transactions. It also provides a platform to transact and to mine which could not be altered or hacked. Every transaction is mined and verified by the ledger of each user in the market, making it almost impossible to forge false transactions entries. Cryptocurrency is also decentralized and distributed across multiple networks of thousands of computers, aka decentralized network instead of a central computer or server like traditional institutions.
Cryptocurrency can also transfer between peer to peer, without large intermediary like banks, forex exchange firms, remittance companies and etc. Therefore, adoption rate is exceptionally fast in recent years as many users transfer Cryptocurrency as a medium of transferring cash quickly, swiftly and with anonymity. There is no intermediary to moderate, regulate and protect and therefore, Cryptocurrency comes with its own sets of risks. For example, if user sends to the wrong person, it will be nearly impossible to recover. Users are in control of money and information at all times but that also put a large amount of responsibility on the users themselves to check and protect. In addition, Cryptocurrency provides anonymity that attracts many nefarious activities like money laundering, tax evasion, trading of drugs, weapons and etc. Initial adoption was wildly driven by such activities and therefore leads to a shady reputation for Cryptocurrency.
As of September 2018, the total market cap of Cryptocurrency is almost USD$200 billion, which is a mind staggering amount, as compared to traditional equity market cap. Despite the negative reputation, we can see that Cryptocurrency also does have it advantages over traditional fiat currency. And it should not be belittled in times to come. Do follow us on the next blog post in finding out what are the different types of Cryptocurrencies in the market. Cheers!