A few years ago, if you had mentioned the term “cryptocurrency” to me, I would have imagined some kind of currency involving an underworld banking system, with hooded traders sitting behind shady computers.
We now read about it not only in the business sections of daily websites or financial publications, but on their front page. Entire sections of news publications are becoming devoted to things like Bitcoin.Buy Bitcoin in Bangladesh
Jurisdictions around the world are scurrying to put into place legislation and regulations to allow or make it easier for companies to carry out initial coin offerings (ICO’s) or token issuances. Is “cryptocurrency” even the right terminology? Or should it be “digital currency”? “Virtual currency”?
So, the question which we must now ask ourselves: whatever we call it, do cryptocurrencies, really deserve this much attention. Should we care this much? What will the impact of crypto be in the long term?
What is it again?
In essence, cryptocurrency is – as blockchain based platforms are meant to be – completely decentralised. As a financial based blockchain, that means it is not governed by any central bank or monetary authority. It is rather maintained by a peer-to-peer community computer network made up of users’ machines or “nodes”. If you know what BitTorrent is, the same principle applies.Buy Bitcoin in Bangladesh
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Using blockchain, it is effectively a digital database – a “distributed public ledger” – which is run via cryptography. Cryptocurrency such as Bitcoin is secure as it has been digitally confirmed by a process called “mining”. Mining is a process where all the information entering the Bitcoin blockchain has been mathematically checked using a highly complex digital code set up on the network. That blockchain network will confirm and verify all new entries into the ledger, as well as any changes to it.
Note that while it is fundamentally anonymous, the mathematics behind it makes it a global public transaction ledger, so every transaction can ultimately be traced through cryptography.
Why is it so important?
First, note there are various types of cryptocurrencies, and for the purposes of this piece, I’ll focus on easily the most mentioned and used: Bitcoin (BTC) and Ether (ETH).
Bitcoin was the very first blockchain – a financial one – created by an individual (or group, who knows) called Satoshi Nakamoto in 2008. Its value has exponentially increased to a ridiculous level: you may have seen pieces swirling around the Internet such as “if I had brought $100 of bitcoin back in 2010, I’d have over US$100 million now” or about Bitcoin’s first billionaires. An increasing number of retailers and internet sellers are beginning to accept Bitcoin as a method of payment.
Without going into too much detail, while Ethereum is very similar to Bitcoin, its uses extend beyond the mere financial side of things such as mining, into the provision of services on its own particular blockchain. Ethereum provides built-in software programming languages which can be used to write, for example, smart contracts that can be used for many purposes, including the transfer and mining of its own tradeable digital token, Ether (which is even more complex than Bitcoin).
Prior to Christmas 2017, the cryptocurrency space went through a process called “mooning”1. That is to say, their prices went utterly and completely ridiculously sky high. It became the absolutely wrong time to buy crypto. Because just before Christmas, the entire market utterly crashed, losing approximately 20% of its entire global market cap.