Cryptocurrencies: The Good, the Bad, and the Ugly
The increase of digital media use throughout the past few years has connected people throughout the world. Individuals of all backgrounds have been able to enjoy the benefits of widespread communication and information transmission through the use of the internet.
However, with the rise of online cash payments and transfers, cryptocurrency has taken the top spot as it pertains to its prospective efficiency and effectiveness. In this article, we’ll cover some of the basics regarding this new and developing method of moving financial assets digitally.
Beginning with the most popular, and at one time, the most prominent, Bitcoin has given individuals across the globe a spark of optimism when it comes to their finances. Despite the fact that many Bitcoin investors, especially those who had purchased the digital asset before its rise to $20,000 in December 2017, have used the crypto as financial security with the hopes of increasing their profits, there are many positive aspects concerning its actual use.
Bitcoin is typically described to people as a cryptocurrency. A cryptocurrency is a virtual currency or digital currency. Basically, it’s a form of cash you can use online to buy products as well as some services. Although many popular companies have begun accepting Bitcoin, others, as well as particular countries, have placed a ban on it completely.
Bitcoin began to grow in popularity in 2008 following major accusations by investors and the public concerning Wall Street banks of irresponsibly using client money. The innovators of Bitcoin responded with an online cash option that removed the middleman, as well as those hefty interest fees, and put the seller in full charge.
Through Bitcoin purchases, users completely cut out their banks from the equation while still having the option of a transparent transaction. The user can control where their money is sent, and can potentially save significant sums of money on transaction fees.
Nevertheless, Bitcoin’s price continually fluctuates. This makes the risks posed to Bitcoin users evident as their investments may plummet causing them to lose their money due to depreciation of the coin. This was the case for many in December 2017, as investors held onto their purchases only to see its price fall exponentially from its peak of $20,000.
Many beginners without much education in cryptocurrency, typically associate this digital asset with Bitcoin, and they aren’t completely wrong. Blockchain technology has been used in a variety of different ways other than just digital currencies. It just seems to be the case that Bitcoin’s popularity has driven this technology to the forefront of the future of finance.
Blockchain applications require an educational background in complicated subjects such as coding, cryptography, math, and computer science. It isn’t exactly for those looking to operate the best game development software.
However, if you haven’t noticed, much of society is moving toward a more technologically compatible world. From electronic ballots on election day to penny stocks purchased from your phone during your wait in the line at the store, Blockchain is just one more innovation waiting to take off.
Ethereum works via a blockchain network which is open to the public. Although there are many complex differences between the coins, there’s one worthy to note. The most significant difference is in its use and ability. Bitcoin offers one specific application of blockchain technology. Bitcoin payments can be sent from individual to individual. However, Ethereum is quite different. It runs programming codes for decentralized applications.
If that wasn’t complicated or weird enough, the digital coin is also “mined” just like Bitcoin. Cryptocurrency mining is a process in which transactions between users are verified. It’s also a way of bringing new coins into existence in the digital world. In the case of Bitcoin “mining”, the product is more Bitcoins. In Ethereum mining, “miners” receive “Ether”. Ether is referred to as the token which “fuels” the network.
Ripple/XRP is a startup based in San Francisco. The company has created a system that’s very similar to Blockchain. Ripple’s program functions very similarly to other money payment methods online. However, in this case, rather than being completely decentralized, it works with banks to provide fast transfers with super small transaction fees.
Ripple allows client banks to apply it to their own systems. For example, the National Bank of Abu Dhabi has, for the most part, integrated XRP into their transactional systems. Users of XRP can transfer massive amounts of money in real-time without the hefty fees. Rather than completely remove the middleman, Ripple benefits users by enhancing their efficiency and practicality.
As of today, Ripple XRP stands with the top three most popular online digital assets.
Cryptocurrencies and others alike are becoming a part of online finance rapidly. People from all over the world will have access to such assets and it will surely contribute to the modernization of trade. To learn more about finance and the future of online cash, look to blogs, YouTube, and news media for the latest updates and news.