Cryptocurrencies are popular for a reason. It’s a secure, decentralized, and anonymous model which is not controlled by any financial entity or authority but its value and flow is dependent on community feedback or market demand.
In a world full of people trying to hack the system, cryptocurrencies are equipped with a code that is complicated enough that makes it impossible to be cracked. This ensures that each transfer is made completely anonymous and is secure for every user. It operates on a decentralized system which means no single financial entity is in control of any cryptocurrency which makes this an ideal avenue for someone looking to expand investments and increase profit.
What are Cryptocurrencies?
Cryptocurrency is still very young but can already be dubbed as a success story in itself. This all started when Satoshi Nakamoto’s paper regarding bitcoin was publicized way back in October 2008 and became an open source by January 2009. Around 10 years following that, bitcoin has had a market capitalization amounting to more than $40 billion, and the rest as they say was history.
The blockchain technology is said to have successfully democratized the financial system. It has taken the power away from just a few people and placed it under the control of the majority. Cryptocurrencies has made a shift from cash to digital transactions. This technology has a lot of uses and advantages apart from banking. There are many industries that can benefit from blockchain and cryptocurrency as this helps speed up processes and save companies millions of dollars. This gets rid of the paperworks altogether as record-keeping certainly takes so much time.
Blockchain Technology – Benefits and Risks
Many banks are now looking at the potential of integrating blockchain into their system. This new technology can predictably cut the costs by $20 billion in a year come 2022. This helps make the rigorous day-to-day transactions more streamlined and speedy. It creates an automated system and eliminates repetitive jobs that people hate to do anyway.
By automating systems, the technology could yield tons of benefits but can also pose vulnerabilities or risks to the system. The blockchain technology is said to change the way systems work just as the internet has changed people’s lives. This revolutionizes the entire system or disrupts the way it works today. These new technological ways do not exist yet and people are creating ways to innovate with the use of technology. It’s about small communities creating big waves.
The Future of Money
Is cryptocurrencies the future of money? It is bound to replace fiat money or gold? The success of cryptocurrency largely depends on the trust, security, and transparency costs. The biggest threat so far to blockchain technology is fraud as even these hackers are investing in technology to gain more sophisticated mechanisms for decrypting codes.
Cryptocurrencies are bound to rise and fall in terms of value and costs today and in the coming years. Digital money or currencies are definitely an important part of the future but this is not created to be a replacement for gold or cash; but a solid addition to the financial economy.