What is Crypto currency
Cryptocurrency is a Digital currency or you may call it virtual currency. Cryptocurrency uses strong cryptography protocols so that financial transactions can be secured. Cryptocurrencies use decentralized control based on blockchain technology that works through distributed ledger technology. Blockchain serves as a public financial transaction database. Cryptocurrency is not control by any government financial agencies. Cryptocurrency is very secure currency, it is near impossible to counterfeit or duplicate. Cryptocurrency uses strong encryption to secure financial transactions as well as to control create new unit of cryptocurrency, and to verify after transferring the cryptocurrency.
First decentralized (blockchain based) cryptocurrency was Bitcoin. It was first released in 2009. Bitcoin is still very popular in this cryptocurrency world. Today there are over 4000 bitcoin alternative cryptocurrencies available in this word of digital currency and more cryptocurrencies are being active in each month.
History of Cryptocurrency
The first Cryptocurrency was Bitcoin, created in 2009 by Satoshi Nakamoto. In Bitcoin, all the operations use cryptographic hash function SHA-256. In 2011, Namecoin and Litecoin was created. Litecoin uses scrypt hash function.
Cryptocurrency definition by cryptocurrency Researcher Jan Lanksy
Jan Lanksy given six conditions to define Cryptocurrencies, these are as follows
1. “The system does not require a central authority, distributed achieve consensus on its state.” 2. “The system keeps an overview of cryptocurrency units and their ownership.” 3. “The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.” 4. “Ownership of cryptocurrency units can be proved exclusively cryptographically.” 5. “The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.” 6. “If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.”
Benefits of using cryptocurrency
Cryptocurrency cannot be counterfeit – Cryptocurrency uses strong cryptographic protocols, so it is impossible to counterfeit or duplicate cryptocurrency. So cryptocurrency is a secure virtual or digital currency to use.
Cryptocurrency make lower fraud risk – Through cryptocurrency now people can make online transactions without revealing their sensitive financial information like credit card or debit card data.
In Cryptocurrency World, Risk of Inflation is zero – There is risk of inflation in Government issued money and effect of inflation will lower your purchasing power. But in case of cryptocurrency the risk of inflation in zero.
Anytime and anywhere you can use your Cryptocurrency – You can use your cryptocurrency wallet and make payment anytime and anywhere, if you have a working internet connection available.
Cryptocurrency payment, lower the transaction fees – Use of cryptocurrency will lower the transaction fees compared to credit card or debit card transaction
Cryptocurrency makes payment fast – Cryptocurrency transactions are faster that credit card or debit card transactions.
Risk of Cryptocurrency
- There is a Regulatory issue with Cryptocurrency – There are some countries where cryptocurrency is strictly prohibited. So there is a risk in cryptocurrency trade.
- Your cryptocurrency wallet can be hacked – Every day we find news about cryptocurrency wallet hack, so there is a security problem with cryptocurrency.
Countries where cryptocurrency (Bitcoin) is legal / Illegal- According to https://www.investopedia.com , in United States, Canada , Australia and The European Union bitcoin is legal. And in China, Russia, Vietnam, Bolivia, Columbia and Ecuador Bitcoin is illegal.
Recent issues with cryptocurrency
Cryptocurrency Wallet GateHub hacked, $9.7 m loss : – Cryptocurrency Wallet service provider hacked by hackers and firm suffered a loss of $9.7 million. Firm said 23 million XRP was stolen from users in this security breach.
US cryptocurrency users under attack of SIM jacking : – Numerous members of cryptocurrency community from United States suffered SIM swapping (SIM Jacking) attack. According to ZDNet “The purpose of this attack is so that hackers can reset passwords or receive 2FA verification codes and access protected accounts.”