Cryptocurrency: A new way to pay
Although there have been many advances, it is the popularization of digital currency that is taking the world into the future of finance, and since money rules the world, this is a topic that all people should be aware of.
What is cryptocurrency
Cryptocurrency refers to a subcategory of digital currency, which is electronically created and stored. As Capella University Business professor Dr. Chris Rose explained in a 2015 journal, cryptocurrency is a new financial system that was started with the creation of Bitcoin in 2008. Since 2008, there have been several other cryptocurrencies created such as litecoin, ethereum, zcash, and monero.
Why do cryptocurrencies matter?
Although talk of cryptocurrencies was limited to specific niche online forums years ago, today the bitcoin network, the largest cryptocurrency economy, has a larger economy than that of some of the world’s smaller nations. The price of bitcoin has risen from pennies to a peak of almost $20,000 for a single Bitcoin in the later part of 2017. Cryptocurrencies, like bitcoin, owe their popularity to the fact that they function within an unregulated market. This means that, unlike the US dollar, which is regulated by the Department of Treasury, cryptocurrencies are not backed by a central bank. They are virtually impossible to counterfeit, and since there are no banking institutions involved, all users maintain their own virtual wallet with their bitcoins.
There is an added benefit of anonymity that comes with cryptocurrency, which is also largely responsible for its popularity. However, the same properties that made cryptocurrencies popular allow users to evade taxes, launder money and trade illegal goods such as guns and drugs.
With several top financial firms and hedge funds focused on cryptocurrencies, it’s time that the general public also becomes aware and accustom to what may very well be the currency of the future. Although an unregulated market might be hard to implement worldwide, the current of digital currencies is an example that other methods of currencies are possible.