Are you Crypto yet?

15. 11. 2019 | | Názory Bitcoin

Cryptocurrency, what first comes to your mind when you hear that specific term? Probably a lot of stuff revolving bitcoin but to your surprise there are possibly thousands of more cryptoassets that work like or even better than bitcoin. The crypto world is achieving newer breakthroughs towards the goal of an electronic cashless system with no middle men involved everyday, many other cryptoassets are now also working on projects involving security and utility which are being appraised by several governments around the world with even full implementation being seen in some countries.

The origin of cryptocurrency

Cryptocurrency, ecash or DigiCash was a system responsible for cryptographic electronic payments which required user software in order to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient. That way the digital currency was untraceable by the issuing bank, the government, or any third party. This was revolutionary technology for something belonging to that period in time. 26 years later the first ever bitcoin was created by a pseudonymous developer Satoshi Nakamato whose identity remains unknown up to this day. He had left behind a mark with bitcoin which later created a wave of emerging cryptoassets that were supposed to take over the payment system we use today. However, it did not make its official place till the late 2012 due to its usage for illicit activities over the internet.

Bitcoin was then starting to be used among merchants thanks to its increase of trust in the public space as the network was more capable than it was before when being used for illicit activities. At that time the stock price of bitcoin reached $13.30 from the very lows of $0.50-$6.50, and by January 1 2014 it reached $700. That year saw the blockchain being split into two different chains due to a bug in the version 0.8 of the bitcoin software. It was later resolved with a downgrade to version 0.7 that allowed all participants regardless of their bitcoin software version to make transactions. Around this time more cryptoassets were starting to get recognized such as Litecoin, Peercoin.

Alternative named Altcoin

But as everything in this world has some alternative, cryptocurrency has one as well and it is called Altcoins which refers to “alternative digital currencies.” Altcoins made a respectable name for themselves because their transaction speed was faster. This revolutionized the payment system as altcoins such as XRP by Ripple are being used by big banks that receive and send millions of transactions. The altcoins have reduced the time for transactions drastically – before you had to wait half a day or a day for the money to come but now they can be received in minutes with the close possibility of seconds in the near future.

These cryptocurrencies can be mined. The mining is a validation of transactions and successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive that contributes to the processing power of the network. The rate of generating hashes, that are used to validate any transaction, has been increased by the use of specialized machines running complex hashing algorithms like SHA-256 and Scrypt.

Safer than your wallet

Security on these networks is high as the developers keep the cyberattacks and sorts in mind. Individuals can become owners of an address and the cryptoassets associated with it, with the help of a combination of public and private keys, made up of random numbers and letter. These keys can be stored in crypto wallets just like your wallet for cash but instead it is safer and does not rely on a central authority or a bank. These crypto wallets keep your assets safe with protocols called seed phrase or the seed or just phrase. This is a group of words which you need to remember or jot down for safekeeping that allows you to access your e-wallet. It does sound like a tedious process but your assets remain completely safe against any hacks or danger that might jeopardize your cryptoasset.

The currency is also being put to legal use by various governments such as Japan, USA, Germany or India. The list goes on, the effort to legalize crypto has become a hot topic among enthusiasts and traders with very recent meeting by the Federal Reserve System (FED) and the U.S. Securities and Exchange Commission (SEC). The vision of cryptocurrencies‘ future is bigger than just being a payment mechanism. It gives power to the people being crushed by a central authority or banks that keep making life tough for the average man with their rates and policies. This system will create a better working world and a happier world for the common man. As 2019 is coming to an end, we do not know what the year 2020 holds for us or for the crypto world but I am sure it is going to be full of wonders.

Picture: Flickr

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