Cryptocurrency is a decentralised digital banking system that function as its own completely unique financial currency. This system was first designed in the late 90s by a collective of cryptographers referred to as Cypherpunks. Their first projects, though it never got to be fully implemented, were cryptocurrencies called B-Money and BitGold.
How cryptocurrency works is that, it is a digital currency system that has central body of authority or administrator. It serves as a money exchange platform and records the transactions, which are encrypted by its cryptography security. These cryptocurrencies have ledgers that are called blockchains; they contain all the transactions are and available to the clients.
The most popular cryptocurrency is called Bitcoin. It was created in 2009 in the wake of the global financial crisis by a mysterious man called Satoshi Nakamoto. Bitcoin’s core goal is to digitize the banking system by completely wiping off the traditional centralized way of banking, but since there’s always scepticism around a new product introduced to the market, Bitcoin won’t be a primary currency across the board for quite a long time. However, that hasn’t hindered its growth since it came into the market in 2009. People use it as an investment tool of residual income.
As mentioned earlier, unfamiliarity breeds scepticism and as a result, there has been some analysts and spectators that have expelled an idea of Bitcoin being no more than just another financial bubble in the loom, given how it boasts a similar trend of an upward trajectory the housing bubble also boasted, which is the famous bubble that sent the global financial system into a tailspin. There’s also a faction of people who are clueless about cryptocurrency as a banking system and the new world it could conceive.
1 Bitcoin in the United States is currently valued at $10,000, and the worth of that $10,000 here in SA is just over R130,000. That’s a lot of money. And it’s worthy to note that even though it is wildly used as an investment vehicle, there are stores that accept payment in Bitcoin, instead of a local currency.
Bitcoin isn’t without its fair share of troubles, though, and that has aided the sentiments of anti-Bitcoin market analysts. Over the past few months, cryptocurrency participants have been experiencing technical difficulties in facilitating their transactions on the markets while trading Bitcoin, and as a result, some have experienced losses in their trade sheets. However, that hasn’t held its stellar performance back; in December, Bitcoin was trading at as high as $20,000 stock markets, until it retreated to about half of that at the beginning of 2018.
In a nutshell, with the right set of tools and a proportionate distribution of the resources and material needed, cryptocurrency could very well be a gateway to a whole new world of finance and banking, with people literally being their own bankers under a single global currency, that could also change the course of diplomatic trades.