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Cryptocurrency – The Big Finance

Cryptocurrency, Bitcoins, and Blockchains – the words have been buzzing around for quite a long time now but are they even worth investing in? Read along to find an answer to this question.


What is Cryptocurrency?

Cryptocurrencies are digitally encrypted money. In layman’s language, we can refer to cryptocurrencies as hidden money. What! Hidden money. How can we use it then? To break it down, a cryptocurrency is like tokens that we get when we are at a casino, but in a virtual form, with each token having a certain value that is determined by economical activities.

Bitcoin, Ethereum, Tether, and Dogecoin can be cited as examples of some well-known cryptocurrencies.


How does cryptocurrency work?

Cryptocurrency works on blockchain technology. This technology has a decentralized database that stores and manages all the information regarding transactions of cryptocurrency. It is a digital ledger that passes an entry in the user’s ledger, every time a transaction occurs.

This concept of holding no one in charge can make cryptocurrency, the currency of the future.


Can we say that cryptocurrencies can be revolutionary?

Yes, absolutely. Cryptocurrency is going to change the way the world economy operates if accepted as a medium of transaction. Although several multinational companies, like Starbucks and Tesla, have started accepting payments in cryptocurrency and many are on their way to doing the same.

Some of the reasons why cryptocurrencies can be revolutionary are stated below:

1. The chances of fraud will decrease tremendously.

With the number of online frauds increasing, the scenario has become risky for the public while making a digital transaction. But with cryptocurrency, the whole risk is eliminated as it is associated with more secured technology i.e., blockchain which tracks all the transfers and updates made by the user. In brief, it increases transparency.

2. Crowdfunding will increase.

As the government sees a bright future in startups, cryptocurrency will make it easier for entrepreneurs to collect funds. This is because:

  • Firstly, they will not have to spend a penny on third-party applications to ask for funds from investors.
  • Secondly, all the investors can have a look at the total amount of funds raised which ultimately increases the trust between both parties.
  • Lastly, since the risk is reduced, many investors will be willing to invest.

3. The subject bearing cryptocurrency is the owner.

When we deposit our hard-earned money in the bank, any economic crisis such as inflation or depression engages us in stress and concern about our funds because, for the time being, we have assigned banks as the owner of our cash. This increases the risk of losing money.

But when you have your savings or money in the form of cryptocurrency, you are the owner of it. In other words, the blockchain eliminates all the intermediaries like institutional banks. Hence, the sole control of funds rests in the hands of its owner i.e., you.

4. It is next to impossible to duplicate the cryptocurrency.

To corrupt a blockchain, a hacker will have to unlock all the blocks in the chain. The process of unlocking a single block involves solving difficult mathematical problems and if only one block is hacked, it appears instantly that the block has been tampered with. Thus, it is difficult to hack a blockchain.

5. The process of procuring and transferring foreign funds will be easier.

Cryptocurrencies can make your travel safer as you will not need to carry cash then because they have worldwide acceptance. This states that along with making transferring and obtaining the foreign currency easier and safer, you can also save yourself from transactions fees.

6. It is open and closes at the same time.

Blockchain technology gives passwords to its users in the form of a private key through which they can have access to their balance.

Thus, cryptocurrency is open and closed securely.

7. It reduces instability.

People living in countries with unstable economies can save themselves from the economic crisis by switching over to cryptocurrency.



To sum up the blog, we can say that cryptocurrency can bring a lot of change at the micro as well as macro level, but only if invested wisely.


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