CRYPTOCURRENCY is also known as digital currency or digital money because it is produced, stored & transfered digitally only. There are too many almost 700 different types of cryptocurrency available.
Concept of CRYPTOCURRENCY :
There are many kind of payment system used by human. Barter system & our current centralized currency are the best examples. Now some people are making use of cryptocurrency as a payment system.
For example if you go to a store for purchasing a stuff in return it offered you some points that you can use in that store only next time whenever you visit it to get some price deduction as it’s regular customer. So here those points are not centralized currency but you and shopkeeper believe in this point rewarding concept so those point act as money. So on this same concept cryptocurrency works.
There are two types of cryptocurrency:
These are the type of cryptocurrency which cannot be mined. The generation of these cryptocurrency is controlled by a authority. So every user can’t mine these cryptocurrency they can only transfer or store it. These authority can manipulate or govern this type of cryptocurrency.
These are the types of cryptocurrency which can be mined by any user. There is almost no authority to control production of these bitcoins. They are limited to a certain rate of production for a certain time in their encrypted programming only. No one can govern or manipulate this type of currency.
How CRYPTOCURRENCY came into existence ?
The concept of cryptocurrency was firstly introduced by SATOSHI NAKAMOTO in the form of bitcoins. Once these cryptographed currency programming is set no one can change it. Even the new currency that will come in existence will be cryptographed in the same manner as previous one.
To know more about bitcoins click on the link given below:
Concept of mining:
As the transaction of these cryptographed coin are done in a encrypted manner. So to solve these encryption complex problems are to be solved for a successful transaction. So while carrying out a transaction between two peers the power of third person machines are used to solve this encryption & for every successful solution it gets a small amount of cryptocurrency as an reward. This rewarded cryptocurrency was not deducted from the transaction amount but it was created at that time. All this complex cryptography are solved in the division of a block. The rate & amount of mining depends upon the rate of solving & receiving these blocks. Only decentralized cryptocurrency can be only mined. You cannot mine a centralized cryptocurrency as we have discussed earlier.
Where CRYPTOCURRENCY are used ?
Nowadays cryptocurrency had become quite popular. Many shopkeepers had started to accept cryptocurrency. Many online services had started accepting cryptocurrency. Many big business firms started to invest in cryptocurrency. Many ATMS of cryptocurrency had been setup all around the world from where you can convert your cryptocurrency to cash & withdraw it.
Cryptocurrency is heavily used in dark web also to get dark & illegal services. All transaction in dark web is done through cryptocurrency only. As these transaction are done in a encrypted way and no transaction details are there with any mediator so it becomes very hard for the government to keep eye on it. So some people also invest money in bitcoin to save taxes as no tax is applicable on bitcoins.
To know more about dark net click on the link given below:
Future of CRYPTOCURRENCY:
Cryptocurrency had been already declared as a legal form of currency in many countries & millions of millions service providers & shop keepers are accepting bitcoins. Many giant companies are investing in them. So by seeing all these future of bitcoins seems bright.
I am not telling you that all cryptocurrency future is bright but definetly some cryptocurrency are having bright futures. Then too nothing can be exactly predicted because they are not regulated by government body. So always invest only reasonable amount of money in cryptocurrency. There is no need to invest huge sum of money in it. There are many small developing countries which had already declared cryptocurrency as illegal practice.