The method of how people acquired goods from one another started from bartering. Then came cash, and eventually, plastic cards we called credit cards were treated like cash. And today, we now have virtual money called cryptocurrencies. In this article, we are going to learn more about cryptocurrency and how it’s taking over the world.
What is Cryptocurrency?
Basically speaking, cryptocurrency is a form of digital currency that uses encryption and operates in a decentralized manner. In other words, cryptocurrency is not controlled by any central bank, and the government does not regulate this currency. Instead, it is virtual money that uses security features called encryption or cryptography so that it would not be counterfeited, ensure secure transactions, and produce the units of currency.
Creation of the Cryptocurrency
The very first cryptocurrency was called Bitcoin, and it was created in 2009 by someone, or some group of people, who goes by the alias of Satoshi Nakamoto. One crazy fact about Bitcoin is that no one actually knows the exact details of who the person (or people) that created this cryptocurrency.
But, one thing is for sure, cryptocurrency was created during the peak of the 2008 financial crisis when the world’s economic systems were hit pretty hard. During that time, people were dismayed by the government and banks for several reasons. One of these reasons was the way how citizens were asked to trust banks and governments, which are two things that are entirely outside of their control, with their hard-earned money.
Not only that, the government and banks have the power to freeze or seize a person’s financial assets for any reason. In short, people aren’t in complete control of their money before cryptocurrencies were created.
The way the government and banks treat ordinary people’s money does not sound rational, does it? Well, that is also what the creator of Bitcoin thought so too. They believe that the power of a person’s money should lie with the person who earned it instead of the bank that keeps it or the government that can take it.
That is why Bitcoin was created. It gives the people the power to engage in any financial transactions without ever depending on the government or banks. Think of Bitcoin as a peer-to-peer currency. This is because no one is in charge of controlling your money but yourself. Any transactions that you do with your cryptocurrency are secured, generated, and verified by a technology known as cryptography. In other words, the government or bank will not be the ones who will verify and secure a transaction; it’s all mathematics.
Advantages of Cryptocurrency
Without anyone controlling your money but yourself, you will have more freedom to do what you want with your money at anytime, anywhere from around the world, and with anyone without any restrictions whatsoever other than those you apply to yourself. In other words, no intrusive government of banks would be invading your security and privacy.
This shows that cryptocurrencies can help people break free from the restrictions placed upon their money by banks, companies, and their own governments.
The Impact of Cryptocurrency
By now, you can already begin to imagine the impact cryptocurrency could have, and these are some of the advantages of using and owning cryptocurrency:
- Cryptocurrencies can be transferred between from one person to another by conducting a financial transaction online instantaneously and with minimal processing fees. This helps side-step the several costly fees that banks impose for such transactions, and people would not have to wait and hold when they do these kinds of transactions.
- Cryptocurrency allows people who are living in oppressed nations to bypass government control or the sanctions from any foreign powers. They can do this because they do not have to depend on outdated financial systems that are susceptible to such issues.
- Cryptocurrency allows people to conduct a transaction with anyone in the world, hassle-free and privately.
- Cryptocurrency can help with the creation of new investment vehicles, such as exchange-traded funds.
- Cryptocurrency can force financial institutions to lower or altogether waive their unfair interest rates out of the market entirely.
- Cryptocurrency can help people sidestep any currency exchanges as well as their fees. Because you will never have to worry about currency exchange if the cryptocurrency is used worldwide.