Cryptocurrency has attracted a multitude of new investors and is known for its extreme risk and extraordinary reward! While most people are familiar with the term cryptocurrency, few actually comprehend its intricacies.
What is Cryptocurrency?
With over 6,700 different cryptocurrencies traded publicly it is evident that it is increasing in popularity at a rapid rate, but what exactly is it? Cryptocurrency is a digital currency which can be utilised to purchase goods and services. Cryptocurrency uses an online ledger with strong cryptography to secure online transactions.
Cryptocurrencies use blockchain technology which is a decentralized technology that is spread across many computers which manages and records a vast array of transactions. When you transfer cryptocurrency funds, the transactions are recorded into a public ledger. In relation to cryptocurrency there is no physical coin or bill unless you use a service that allows you to cash in cryptocurrency for a physical token. Bitcoin and Ether are two of the most popular and well-known currencies however, new currencies are constantly being created.
Paying with Cryptocurrency?
Cryptocurrency can be used for quick payments, as it is a means by which transaction fees that regular banks charge can be avoided, another reason for its popularity is because that it offers some anonymity. Many people hold cryptocurrency as an investment, in the hopes the value goes up. While it is currently easily accessible and tradable, more stringent policies and regulations are to be expected.
When using cryptocurrency as a payment method there are a number of things which people should be made aware of:
- Cryptocurrency payments do not have legal protections which credit or debit cards have.
- Cryptocurrency payments are generally irreversible.
- Transaction information may be made public.
What is the future of Cryptocurrency?
Cryptocurrency has saturated the media particularly in recent times as a result of Tesla’s Elon Musk raising new doubts among institutional fund managers over the future of cryptocurrencies as an asset class. This occurred as a direct result of Tesla stating that it will no longer accept payment in bitcoin for its vehicles as a result of environmental concerns.
Furthermore, UBS Wealth Management, Pimco, T Rowe Price and Glenmede Investment Management have all expressed grave concern with regards the potential of cryptocurrency investments. Cryptocurrency has been associated with high levels of volatility and while certain investors are willing to take the risk as a long-term venture opportunity, others are not.
While it has raised cryptocurrency has raised uncertainty, it also has the potential for greatness with currencies such as HappyCoin. This is a charity coin which donates to mental health organisations on a weekly basis.
Overall, while nobody knows exactly what the future of cryptocurrency holds it is evident that while uncertain, it has the potential to improve society if used correctly!
If you are interested in learning more about topics such as cryptocurrency you should register today for Cyber Science 2021!