When you hear the word “cryptocurrency,” you may be confused as to what it is actually referring to or why it has become such an important part of our culture. Many people feel that it is simply a way to get around big banks while others feel that it has inherently illegal ties. However, none of these theories are exactly true. The emergency of cryptocurrency and that roles that it plays within modern society are much more complex and involved than most people think.
The biggest reason that these types of currency have emerged in the last 10 years is the need for better security. Everyone has heard about accounts being hacked, people losing all of the money that they have worked for over the years, money disappearing into thin air, and people feeling that they cannot trust the big banks. Therefore, currency that cannot be controlled by the big banks and that is not centrally available was seen as one of the best options to create a secure currency. This is why the idea of personalized wallets with codes that are held off site are the standard for this kind of currency.
However, the need for security was not seen as stopping there and many people felt that even if they could trust themselves, they didn’t want others to be able to see the transactions that they are completing. This led to the currency being completely encrypted, making it impossible for most people or computers to make sense of the code when it was taken out of context. Even if someone were to put a logger or something similar on most mining programs, all that they would get is a jumble of information that cannot be used to complete transactions.
In addition, the currencies have implemented tokens that tell you when a transaction has been completed and allow you to verify the amount that is being transferred into your wallet. Unlike a bank, there is no way to write a fake check, either the amount is available and the transfer goes through, or the money never makes it to the account. This makes it so that transactions can be completed in mere seconds and so that fraud is not a common concern. This has made it a popular way to move around large amount of money, ensuring that they will not be stolen or lost.
Another thing that sets apart this currency type from others is the ability to mine or create it. This is done via a computer and is extremely slow if you have a lower end computer, but high end rigs are able to do it with both speed and accuracy. Depending on the currency in question, different values with be “mined” at different intervals. This has made it possible for people without access to traditional money to profit from the implementation of the entire currency movement. It also allows those who have higher computing power to substitute their resources for traditional wealth.
Of course, the currency would be nothing if it wasn’t being accepted around the world. There are both places to spend it as it is online and places to exchange it for other currencies that are usable in the real world. In this way, people have been able to make their fortune online, taking payment in a currency that doesn’t exist in the physical space, but is worth something none the less. This means that most of the people who have made a large amount of money off of these currencies are extremely web proficient and have found it easy to make their way through this new digital world.
Finally, cryptocurrencies offer a way to trade money between individuals, based on what each individual things a good or service is worth. While you will get a static amount of cryptocurrency when you do a trade, the amount of goods that it will purchase or the amount that it will convert to in real world currency is all based upon the assumptions of people who are generating it and those who are buying it in the real world. This makes it possible for new currencies to be introduced for different markets, allowing the market to show itself as a valid arena for money making.