The Rising Popularity of Cryptocurrency (and How It Works)
Many people are skeptical of cryptocurrency. There are many who do not understand what cryptocurrency is and that makes them adverse to trying to use it.
Yet, despite this hesitation, cryptocurrency is becoming more popular as a subject to explore and as a payment system. Especially, for people looking to find a new way to purchase real estate.
The Use of Cryptocurrency
The concept of cryptocurrency seems complicated to someone who does not use it. Cryptocurrency does not have any physical way of exchange. There are no coins or bills to exchange. It is an online-only transaction that is exchanged between two parties. It is similar to using a debit card online, trusting the money to be placed into the right account.
In a very basic way, cryptocurrency is money that has been digitized to send through the internet. There is no bank involved in the transaction. The people who use cryptocurrency accept the value that is placed on it and use it to pay for a certain item or service.
Other Cryptocurrency Terms
When cryptocurrency was first created the term “bitcoin” was created. Its creator remained anonymous simply going by a pseudonym. The ability to stay anonymous is a key factor in people’s desire to use cryptocurrency. Bitcoin has now been around for around nine years and has been growing in popularity.
As people exchange other forms of money, there are many go between agencies that they will use. Each participant’s bank account will be verified and the transaction goes through only when the balances check out. The goal of cryptocurrency is to cut out the need for a bank to exchange a form of currency.
The term cryptocurrency was actually born from “cryptography.” Cryptography is what provides security to exchange currency in digital form by using a database. As cryptocurrency, has grown there are now multiple currencies available. There are even some countries attempting to make an official cryptocurrency.
Using Cryptocurrency As Payment
The beauty of cryptocurrency is that it is all contained by a computer. The computer will use an algorithm to track transactions and will report purchases. This can be done within minutes and can possibly take up to an hour. However, it is one of the quickest systems to verify purchases.
These transactions are tracked by using a blockchain, which could be compared to the way a bank tracks transactions. However, it is all online and is done with encrypted digital ledgers that are then available to the public.
Anyone that is using cryptocurrency will have a platform that tracks their cryptocurrency. This program will hold the necessary keys that are both private and public and are needed to complete a transaction. The private key used in a transaction must be the same as the public key in order to have the transaction completed.
Judging Cryptocurrency
One of the aspects of cryptocurrency that is always praised is the speed of transactions. As mentioned previously, transactions can be verified in under an hour, unlike bank transactions which may take days. These transactions are also secured through the blockchain so it is relatively safe to use cryptocurrency.
There are no stipulations on who can have a cryptocurrency wallet. As a result, anyone can access this form of currency. With the speed of transactions being verified, no one is able to pay from their account multiple times and overdraft.
The problem with cryptocurrency lies in the fact it is so unregulated. If people stop using and accepting cryptocurrency, it no longer holds value. If a key is lost there is no retrieving it which means a user may suddenly be out of currency.
The government is starting to look at fraudulent companies that have tried to take cryptocurrency from others. There are also many criminals attracted to cryptocurrency in order to avoid being tracked. This makes it an issue the government is starting to take interest in.
Cryptocurrency is a way for anyone to purchase goods and services securely online. It is different than using a bank but could be comparable in terms of the way transactions work. The lack of knowledge of cryptocurrencies makes it difficult to always use them as payment but this may be solved if more people begin to understand and use this form of currency.