Over the years, technology has revolutionized our perspective of the world. Technology has created incredible tools and resources, putting each person’s most useful information at their fingertips.
Modern technology has made it possible for the discovery of many functional devices and platforms such as smartphones and online banking. With these revolutions, technology has also made our lives easier, faster, better… and even more fun.
Every person who lives in the western world has experienced how technology has changed their life.
Some may have not noticed the change, but technology has gradually evolved in front of their eyes, in so doing forcing them to move with it whether they like it or not.
Gone are the days where you must enter a bank to withdraw or transfer money to someone. It is even possible to live without ever going into the bank. Many banks are already making registration possible online and accessible to people.
Companies like PayPal and MoneyGram have created a platform where people can send and receive money from any location using the Internet.
Payment processes have also been simplified, Yes that’s thanks to technology. You don’t need cash when going shopping, your cell phone and a banking app make it possible to do all the necessary bill payments online.
But wait a minute, that’s not where it ends. Now we are looking at technology that is not only capable of being used for payments but introducing a whole new system. The Internet of Money, Crypto Currencies.
Cryptocurrencies, are sometimes called virtual currencies, digital money/cash, or tokens. They are created and stored online and are not backed by a government.
They’re backed by their respective networks. In simple words cryptocurrencies are digital, decentralized currencies, that rely upon cryptographic principles for generation, distribution, transferring etc.
Today cryptocurrencies have become a global phenomenon known to most people. Cryptocurrency made the leap from being an academic concept to (virtual) reality with the creation of Bitcoin.
Bitcoin is a new currency & the 1st cryptocurrency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto, from this came the Blockchain Technology, the backbone behind it.
Bitcoins were created with the idea to have transactions with no middle men – meaning, no banks! From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
Bitcoins are created digitally through a “mining” process that requires powerful computers and hardware that allows you to solve mathematical algorithms in exchange you receive the Cryptocurrency you are mining.
They are currently created at the rate of 25 Bitcoins every 10 minutes and will be capped at 21 million, a level that is expected to be reached in 2140.
In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward.
Mining is a term used for the process of generation/creation of Bitcoins & other cryptocurrencies. It is a process of verifying all transactions and add it to the Public Ledger called blockchain.
While Bitcoin attracted a growing following in subsequent years, it captured significant investor and media attention in April 2013 when it peaked at a record of $266 per bitcoin after surging 10-fold in the preceding two months. Bitcoin sported a market value of over $2 billion at its peak, but a 50% plunge shortly thereafter sparked a raging debate about the future of cryptocurrencies in general, Bitcoin in particular.
Bitcoin as a form of payment for products and services has grown, and merchants have an incentive to accept it because fees are lower than those typically imposed by credit card processors.
The emergence of Bitcoin has sparked a debate about its future and that of other cryptocurrencies. Despite Bitcoin’s recent issues, its success since its 2009 launch has inspired the creation of alternative cryptocurrencies such as Etherium, Litecoin and Ripple.
A cryptocurrency that aspires to become part of the mainstream financial system would have to satisfy very divergent criteria. While that possibility looks remote, there is little doubt that Bitcoin’s success or failure in dealing with the challenges it faces may determine the fortunes of other currencies in the years ahead.
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So how does the Blockchain technology fit in all of this? It is a reliable, difficult-to-hack record of transactions – and of who owns what. Blockchain is based on distributed ledger technology, which securely records information across a peer-to-peer network.
Although it was originally created for trading Bitcoin, blockchain’s potential reaches far beyond cryptocurrency. Blockchain ledgers can include land titles, loans, identities, logistics manifests – almost anything of value. The technology is still new, but the potential impact it can have on business is exciting, and immense.
- Decentralized (not owned by any bank or financial institution)
- Bitcoin as a Deflationary Currency. The value of Bitcoin will only increase until it plateaus and the last Bitcoin is mined (issued). Unlike Fiat currency which is prone to inflation and the value decreases.
- Price driven by supply & demand.
- Everything is being automated & digitalised. Currency is also to follow suit so Bitcoin & other Cryptocurrency are a great space to invest.
These characteristics make Bitcoin fundamentally different from ‘Fiat Currency” is backed by the full faith and credit of its government. While the bank regulates the amount of currency issued in accordance with its monetary policy objectives, there is theoretically no upper limit to the amount of such currency issuance.
While the number of merchants who accept cryptocurrencies has steadily increased, they are still very much in the minority. For cryptocurrencies to become more widely used, they must first gain widespread acceptance among consumers.
However, their relative complexity compared to traditional currencies will likely deter most people, except for the technologically adept.
Decentralized cryptocurrencies such as bitcoin now provide a channel for personal wealth that is beyond restriction and confiscation.
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The science of today, is the technology of tomorrow.