Bitcoin launched back in 2009 and with its launch, created an industry that is now worth billions of dollars. This launch also jump-started a wave of innovations in the world of cryptocurrency. Some people believe that soon it will become an integral part of our society and others think that this is only a passing phase.
So what is a cryptocurrency and do they have any benefits over traditional forms of currency? Well, here’s the Xpress Train’s beginner guide to cryptocurrency
What is cryptocurrency?
Cryptocurrency is a virtual means of exchange. They exist only in digital form and can only be transacted online. There are no physical forms of cryptocurrency at all.
A core aspect of cryptocurrency is that there is no centralized system of control for it. Its value and production are entirely dependent on those who use it. Cryptocurrency leverages on blockchain technology to better secure this feature.
With blockchain technology securing it, there is no outside interference from a government or institution regulating its use for transactions.
So if it exists entirely online, how do you get a hold of cryptocurrency? Well, there are a few ways to acquire cryptocurrency. You can choose to
- Mine it.
- Exchange goods or services for it
- Purchase it using the assistance of a broker
- Purchase it using US dollars or some other cryptocurrency you currently have.
History of cryptocurrency
Cryptocurrency is not a recent idea. Its history can be traced back to as far back as 1989 when David Chaum, a pioneer in cryptocurrency, tried to innovate Digicash. Others, such as E-gold in 1996, bit gold in 1998 and B-money in 1998, attempted and failed to achieve the current success of cryptocurrency.
The digital currency finally succeeded in 2008 in the form of Bitcoin. This was the first decentralized virtual coin, and in 2009, it went public.
Now, it is the most popular cryptocurrency in the world. Despite this, other cryptocurrencies followed in its footsteps and are currently acceptable for transactions in many countries. Among these are the likes of Ethereum (ETH), Litecoin (LTC) and Ripple (XRP).
Since Bitcoin is the most popular cryptocurrency, others are collectively referred to as altcoins.
The growth of the cryptocurrency world has been astounding, to say the least. In 2015, there were more than 500 kinds of cryptocurrency. Yet, only 10 of them exceeded $10 million in market capitalizations.
By September 2017, the total market cap of cryptocurrency had grown to over $60 billion. By December of the same year, this value had reached $600 billion.
The amount of coins present in the market continues to grow, and the market cap continues to exhibit rising and falling tendencies.
Benefit of Cryptocurrency
The most important benefit of bitcoin lies in the fact that it is decentralized. Since there is no governing body to regulate it, cryptocurrency is entirely free from outside manipulation.
For regular currency, the government and the central banks are in control. They determine how much is supplied and raise and drop the value of the local currency to suit their goals. But for cryptocurrency, only the users can control the value making use of the recent technology trend of a peer-to-peer network.
While there is still a lot of work to be done before bitcoin can take over from traditional forms of money, it is evident that it is working towards just that. Maybe someday in the future, all our transactions will be carried out using cryptocurrency.