What is Cryptocurrency?

Cryptocurrency and local business transactions in Toowoomba

21st-century unicorn – or the money of the future?

The inventor of the most famous cryptocurrency today – Bitcoin – attempted to build a “peer-to-peer electronic cash system”. This had been tried many times before but the main point of difference between Bitcoin and previous efforts like Digicash was that it was to be entirely decentralised. Without an overarching entity controlling the currency, the notion of “trust” would be removed from the system.

To combat “double spending”, the major flaw in all digital cash systems at that point, Bitcoin inventor Satoshi Nakamoto proposed a revolutionary technology known as the blockchain to record all the transactions made with his currency.

For any single balance, transaction, or change to the network to take place, there would need to be a consensus amongst those validating the network – the miners. Since Bitcoin’s invent, many other programmers have attempted to use the model and tweak it to provide what they consider to be a more functional form of digital cash.

Other cryptocurrencies include Litecoin, Monero, Ether, and New Economy Movement. Many of these efforts tailor their currency for a special purpose. Speed, price, and privacy are among the most common.

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What is it used for?

Being such a new technology, it may be that cryptocurrency has not been used for its eventual use case. Still, today it is used for many purposes. These include, but are not limited to the following: remittances, trading, investment, payment for goods and services, private monetary transactions, gambling, and as a hedge against national currencies suffering rapid devaluation (Venezuela, Greece for example).

“Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.” – Thomas Carper, US-Senator

But beyond the noise and the press releases the overwhelming majority of people – even bankers, consultants, scientists, and developers – have a very limited knowledge about cryptocurrencies. They often fail to even understand the basic concepts.

Why are Bitcoins worth so muchbitcoin

Bitcoins do not have value as a physical commodity like gold and are not widely accepted as legal tender like dollars. Rather, Bitcoin appears to have value for the following reasons: It is popular. In short, people accept and trade in Bitcoin because other people accept and trade in Bitcoin

Where does the money come from in Bitcoin?

With these attributes, all that is required for a form of money to hold value is trust and adoption. In the case of Bitcoin, this can be measured by its growing base of users, merchants, and startups. As with all currency, bitcoin’s value comes only and directly from people willing to accept them as payment.

How is the value of a Bitcoin determined?

bitcoin images

In actuality, the US dollar has no intrinsic value other than the fact it is issued by the United States. Most modern currencies are fiat money. Bitcoin follows the same principle, in that its value is determined by perception. … The raw demand for bitcoins really depends on the velocity of the currency.
Since I started to write this article we have seen the relative volatility of cryptocurrency unfold, for it to bounce back quite significantly. There were explanations provided linking it to a Lunar cycle or to possible tethering. Banks are starting to adapt their policies and some are not allowing transactions to be made with credit cards etc. Cryptocurrency is certainly the KING of digital disruption and the pressure is now on businesses to keep up, with Coronis announcing they will accept Bitcoin transactions for Real Estate transactions and coffee shops in Toowoomba accepting Bitcoin transactions, is your business ready for Cryptocurrency?

Stay in touch

I hope you have gained value from this article, I have been reading and listening to podcasts about Blockchain aCryptocurrencyecy and I have tried to put a few paragrpahs together to start the conversation. If you have anymore insights that would help feel free to comment or let me know which Cryptocurrency you prefer?
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