Cryptocurrency / Digital Currency – What is it?
Cryptocurrency / Digital Currency – Definition
Cryptocurrency / digital currency is a new trend. It is new money. It is a medium used to exchange goods or services just like any other currencies USD, Euro, Yen, Peso and others. The only difference is that cryptocurrencies are designed to exchange digital information using the principle of cryptography. It converts the electricity into codes which have monetary value. Cryptography made the transaction secure and private.
Cryptocurrency / Digital Currency is also referred as Digital Money. Most cryptocurrencies are fiat currencies by nature, meaning they have no physical value tied to them. Cryptocurrency / digital currency is also usually not controlled by any government or country. The value of a cryptocurrency / digital currency is solely determined by supply and demand as it traders buy and sell the currency on the public traded exchanges.
“Cryptocurrency / Digital Currency gives you ultimate control over
when and how you use your money!”
Cryptocurrency / digital currency involved mining as a metaphore for the process of creation of the money (coins) and miners which have softwares and algorythms able to do the validation and process transactions.
There is a difference between cryptocurrency and digital currency. Cryptocurrency is a ‘digital currency’ that uses advanced encryption technology to facilitate free & secure peer to peer transactions. Cryptocurrencies have a security feature called blockchain
ensuring all the different steps of creation and transaction with each and every coin, which digital currencies don’t have. This actually is a MAJOR difference and any people interested in being involved in the cryptocurrency / digital currency industry should be aware of that aspect. In fact, all electronic currencies which don’t have a blockchain are in fact violating security rules and could face to be abandoned.
Cryptocurrency / Digital currency – The History
Bitcoin is the most popular cryptocurrency / digital currency and the first one that ever created way back 2009. Satoshi Nakamoto created Bitcoin and actually the technical system on which crytocurrency is based on. In fact, the name of Satoshi Nakamoto is a pseudonym and nobody knows actually who created Bitcoin. It remains totally anonymous. This cryptocurrency / digital currency is based on proof-of-work system.
There is also Altcoins (all other cryptocurrencies than Bitcoin) and the first one created was Namecoin in April, 2011. This coin was created to establish a DNS which is decentralized to make more difficult internet censorship.
Litecoin was released next, in October 2011. This cryptocurrency / digital currency uses scrypts successfully. With this public doesn’t need to use ASIC machines to mine for Litecoins. It was in 2013 that Litecoin gain attention and it reached $1 billion market cap.
In 2011, Ripplecoin was created in the same protocol than Bitcoin.
Cryptocurrency / Digital Currency – What makes it so different than the money you usually spend online via credit and debit cards?
Cryptocurrency / digitalcurrency – A few key differences between it and fiat currency to be aware of:
1. No central bank determines it’s value or controls the flow of new cryptocurrency / digital currency coins (money) being created. So there is no manipulation of the amount of money in existence by an institution such as we are used to with all the traditional currencies (Dollar, Euro, Yen…).
For example, the US Dollar is controlled by the Federal Reserve, but cryptocurrency / digital currency like Bitcoin, are controlled to produce an amount of coins limited by an algorithm that no single person, company or country or other type of interest can change. Each legitimate and compliant cryptocurrency / digital currency have a Market Capitalization (Market Cap). Even though hundreds of thousands of coins are created (mined), cryptocurrencies always decrease their production over time because they are designed that way. The purpose is to create market caps instead of inflation which is happening to our fiat currencies.
2. The value of a cryptocurrency / digital currency is determined by the market (whatever people are willing to pay for it). Countries are not involved, so the welfare of your nation’s economy will not affect the value of your cryptocurrency. The value of a true cryptocurrency is based solely on supply and demand and functions much like a commodity on the stock market. Not the case for Digital Currency.
3. Cryptocurrencies have the lowest fees to transfer money anywhere in the world and almost no limitation. The fee is not affected by distance, country borders or any other of the usual factors. This makes it very fast and easy whether your objective is to transfer enormous sums of money globally almost instantenously or to conduct micro transactions with someone on the other side of the earth. Cryptocurrency / digital currency creates a world of possibilities.
Cryptocurrency / Digital Currency – Their Benefits
People love cryptocurrency / digital currency. For different reasons. First, it offers an easy and more and more instantaneous way to transfer money globally. Second, it is way cheaper to pay with a crypto-currency or to transfer money. There are almost no fees while using cryptocurrency! Third, it provides privacy for making transactions. For example, cryptocurrency can’t be traced like a credit card or a bank account can be to a specific transaction. At the same rate, all Bitcoin transactions can be forever traced to the specific ‘alias’ or wallet key that performed it.
This makes for a lot of discussion about whether Cryptocurrency / digital currency are either untraceable or 100 percent traceable. Obviously if it can’t be traced, it has an immediate appeal for the black market, and even though media often only reports on cryptocurrency / digital currency as something only used by criminals to buy drugs on websites like ‘Silk Roads’… the truth is that most people who use cryptocurrency / digital currency are regular everyday people just like you and me. Heck, I just had to accept money in Bitcoin from a Pakistani fellow last week. They don’t have access to Paypal! Bitcoin was a convenient solution.
Regarding privacy, people like cryptocurrency / digital currency because it is making it possible to maintain some privacy in a world where someone is always looking over your shoulders whether its the government, an Internet service provider, or data mongering corporations. Cryptocurrencies such as Capricoin, Darkcoin, Blackcoin or Zerocoin are constantly trying to increase the privacy of the individual.
What is the Future of Cryptocurrency / Digital Currency?
A new cryptocurrency called Capricoin has an even more advanced encryption system than Bitcoin. It also acts as a payments platform so that transactions are 100% secure at the same time as recorded in a public ledger so as to work alongside the fiat currencies of the world, and not against them (meaning Capricoin has been designed to be government friendly and withstand future government regulations that will eventually be imposed on cryptocurrency / digital currency). Learn more about this new cryptocurrency / digital currency HERE
Some of the weaknesses of Bitcoin are its expensive cost for mining and maintening its network worldwide. It is also really complex to mine by individual. Then, one big weakness is its volatility and speculating transactions. Finally, a last one is that Bitoin had not been designed for usage mainstream.
So while Bitcoin started it all, in the free market there will always be competition that will learn from the mistakes of it’s competitors, in order to better serve the consumers. What you are seeing with Capricoin is surely a first cryptocurrency that brings innovation and a better designed mousetrap to market. Capricoin has been designed to become mainstream and used by the masses. Mining is way easier, cheaper and does not require any specific equipment. Transactions are also significantly faster and take usually 1 to 3 sec (can be up to 20 min to confirm a transaction with Bitcoin).
So, What Is A Cryptocurrency?
The answer from experts in Finance is: Cryptocurrency / Digital Currency is The Future Of Money
So whether you want to use it in everyday commerce, or purchase it for it’s potential increase in value and make some serious gains… how do you get into the world of cryptocurrency / digital currency? There are plenty of ways to get started, whether you are going to trade on the exchange or get into mining your own coins.