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Cryptocurrency is a currency that comes in a digital form, and can be accessed or used over a network. The transactions done using Cryptocurrency are said to be very secure because it uses codes. A primary feature of Cryptocurrency is its methodical nature. This currency is not regulated by any single, chief authority. This is the reason that any government cannot exert influence over how Cryptocurrency works.

The usage of Cryptocurrency involves, moving the authority away from one, single source. This is done through the technology of the blockchain. A blockchain stores records or data on a list that is secured with coded language. A peer-to-peer network is used to manage a blockchain. Once a data is registered on this network, it cannot be changed without involving other peers. This, therefore, adds to the security of the whole network.

People, for the first time, started noticing Cryptocurrency with the arrival of Bitcoin. This was devised in the year 2009 by someone called Satoshi Nakamoto. This name, however, is said to be a pseudonym. Nakamoto carried the legacy of Cryptocurrency forward with Bitcoin that was the first successfully functioning Cryptocurrency. After the Bitcoin, a lot of alternative Cryptocurrencies came into usage, like, Litecoin, Peercoin, namecoin, etc.

Advantages of Cryptocurrency

Let us look at the benefits that Cryptocurrency claims to have:

  1. Convenient usage

Any transaction is made easier with Cryptocurrency because the transfer process is much easier. Every transfer occurs with a set of secret codes that are kept private. The process also does not charge you a lot of money. This is different from many other transactions. For instance, many banks and organizations levy high rates on the customer for every transaction that they perform.

  1. Blockchain technology

Blockchain functions as a key characteristic feature of the Cryptocurrency system. It secures all the data that has been entered into the system, by making it accessible to every computer that is connected to the chain. Any new information that is generated or modified, has to be verified by all the users. This makes it almost impossible for anyone to create a false transaction record.

  1. Long-term uses

A lot of experts have visualized a bright future for Cryptocurrency. According to them, it can have a vital influence in the field of voting, collecting funds from the public, etc. Not only will this make risky processes like voting very secure, but also, reduce the cost of every transaction that will be done.

Disadvantages of Cryptocurrency

Cryptocurrency might claim to be fool-proof, but it has its own set of disadvantages as well. Let us see what those are:

  1. The digital nature

Since Cryptocurrencies function on a digital platform, they are not immune to technical problems. A technological fault might result in the whole system to break-down. So, a backup has to be created beforehand, failing which, all the data might be lost.

  1. Can be misused

Personal information and identity of a user is not revealed in the network of Cryptocurrency. This makes it easy for a person to indulge in wrong activities under an anonymous identity. People might evade from paying their taxes or whish away money under a false identity.

  1. Theft and Hacking

Cryptocurrency is all about digital technology. This means that expert hackers can create a puncture in the system. Cryptocurrency also has a hacking history. There is a possibility that hackers might steal currencies.

Keeping the debate about Cryptocurrency aside, we can say that it is the new age currency and will hold immense importance in the future. This might change how economies function and create a huge impact on world finance.