Cryptocurrencies have been making noise since Bitcoin reached $20,000 in December 2017. But what’s so special about them? Are they worth the fuss? Let’s find out, but before that, let’s see what a cryptocurrency is.
What is a cryptocurrency?
A cryptocurrency is a decentralized virtual asset that is generally used as a method of exchange. Blockchain is the data-keeping technology behind Bitcoin that essentially is a distributed ledger. There are blocks of data in blockchain connected through cryptography.
The data in the blocks is related to transaction: date, time, etc.. The transactions that happen through blockchain are between two parties only. The transactions should be verified by a chain of computers across the globe. After the details are confirmed, the transaction is stored in one of the blocks.
Every computer in the blockchain network has a unique version of the technology. Hence, there are millions of the same blockchain. This makes network manipulation virtually impossible.
So, what is special about cryptocurrencies?
Cryptocurrency is the first decentralized and distributed currency. This is because currencies have always been controlled by governments and most people nowadays don’t really trust their governments. Hence, decentralized currencies were very interesting to people. They liked the fact that it didn’t depend on their authorities and that no one could influence their transactions.
On the other hand, the Blockchain technology opened a new era in data-holding and spread across many other industries from insurance to agriculture to health care.
In terms of investing, cryptocurrencies are the fastest way to make profits. Crypto coins are a fast growing market and, regardless of the market being bullish or bearish, increasingly more and more people adopt cryptocurrencies. As a result, the liquidity of crypto-assets grows too.
On the other hand, because the market is small, it is highly influenced by both small and large changes in the financial and crypto industries. Therefore, the volatility of the crypto market is very high. This means higher risk and that risk, consequently, leads to bigger profits.
Last but not least, most cryptocurrencies have a limited amount of assets. In view of the limited supply of crypto coins, as the demand goes up, the price follows the same route.
Great for Business
Cryptocurrency is changing the world in many ways and one of them is business. As stated before both blockchain and crypto coins were integrated into many industries throughout the world. Governments also took place in researching and implementing these innovational technologies. However, many businesses significantly benefited from crypto.
A large benefit of cryptocurrencies is the smart contract feature which is self-executing and written into the lines of code. Smart contracts can be used for insurance, banking, real estate, gambling and much more. There are many smart contracts platforms in crypto and the standout ones are Ethereum, Cardano and Stellar. To find out more about Stellar just check out xlm news.
Another thing that stands out is the international transaction speed and fees. Platforms like Ripple have transformed the international transfer sphere by executing transactions in less time than banks or any electronic cash transfer platforms.
All in all, crypto coins are both a great investment and good technology to look into for both yourself and your business. AND if you want to use your crypto-assets the right way, look into this awesome crypto tracker guide.