Lately, Bitcoin is a hot topic of discussion; few are accustomed to the concept while few are still confused. Apart from Bitcoin, there are several digital currencies available on the market. To simply state the concept, cryptocurrency is a form of digital money, which has some value to it.
The sole purpose of designing cryptocurrency was to give society a unit, which can be used as an exchange without relying on the banks. The first cryptocurrency was Bitcoin, which was designed in the year 2009. After that many types of cryptocurrencies came into existence. The name is given cryptocurrency as it uses cryptography, which is mean to exchange digital information in a secure way.
Benefits of cryptocurrency are as follows
1) Minimal or no chance of fraud
-> As it is end to end, and as the data is very cryptic, it has no chance of fraud.
2) Ability to send money to any part of the world
-> At times, location becomes a barrier to sending and receiving money, also change in currency and bank rules and regulations makes delay in transfers. In addition, the increased time duration requires several follow-ups from sender and receivers end.
3) Service fee to use cryptocurrency is very less
-> Banks typically require annual service fees to operate, whereas it is not true for digital money.
4) Accessible to people who do not wish to use banking
-> Many people who are not very happy with banking transactions then digital money can be a boon.
5) Leads to decentralization
-> Instead of relying on several systems, digital money will provide a centralized system.
6) Universal recognition
-> Business is no longer limited to geographies, thus digital money becomes the best option to go for. It is used universally and has faster transactions.
7) Faster, cheaper and secure transfers
-> When a large amount of money is transferred, it requires a stable system to do so.
8) Can get rid of government monopolies
-> With digital money, one does not worry about any rules and regulations of the government.
How does cryptocurrency work?
Cryptocurrencies use a distributed public ledger called blockchain; it records all the transactions of the currency holders. Cryptocurrencies are created by mining. They are mine by solving complex math problems.
Types of cryptocurrency
-> Bitcoin is the first cryptocurrency developed in the year 2008; it follows a peer-to-peer network while doing online payments. It uses blockchain to make transactions.
-> Advantages of Bitcoin
a) Let’s you hold own coins
b) Money transfer
c) Offers protection against inflation
d) No government boundings
e) No chargebacks
-> Ethereum was proposed in late 2013 and went live in July 2015. It is an open source, public blockchain based platform. It uses smart contract to do virtual payments. Ethereum provided virtually, the machine is known as Ethereum virtual machine, which executes scripts using public node network. As of 2017, Ethereum is a leading platform for intial.coin offerings and covers over 50% market share.
-> Ripple is currency exchange network. It was released in 2012 having a distributed protocol having ledger known as XRP. Lately, all businesses have made there own payment systems which do not interact well. With each other, the ripple has made the interaction between systems possible. It links payment systems, digital systems, and banks together to have a frictionless transfer of money globally.
4) Lite coin
-> Lite coin is similar to Bitcoin. It is not a competitor to Bitcoin. However, it complements it. Lite coin is also blockchain based. Bitcoin transfers a block.i. Ten minutes whereas lite coin takes mere 2.5 minutes to transfer a block. Thus, we can say the lite coin is similar to Bitcoin with only change in its transfer speed.
-> Dogecoin is the peer-to-peer digital currency that enables you to easily send money online.
Doge is a fun, friendly mascot and it is a breed of Japanese dog. It sets itself apart from other digital currencies, as its community is friendly and fun.
Why adapt to digital currency?
With the development in every aspect of life, the payment methodology is still stuck in the disco era. It is high time that businesses adapt to latest digital money transactions as it has several benefits and majorly as its fast and fraud protected. With so many options to choose from, it is wise to adopt one as early as possible. If you still feel the task to have a shift from rational payment method to digital money is too complicated, one can always take help of app development companies.
Potenza Global Solutions has many developers who can build apps as per your needs and help you ease into the digital money transactions.