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What is Cryptocurrency? Is It Accepted Globally?


What is Cryptocurrency? Is It Accepted Globally?

Money is an ancient technology and is almost as old as language itself. Back in the day, before the introduction of money, all transactions were done with the barter system as products and services were not quite complex. For instance, a farmer who grew vegetables could exchange a reasonable quantity of it with wool from a Shepard. With the introduction of precious metal coins as currency, the barter system eventually faded out, and so did precious metal coins with the adoption of paper currency notes. With the advent of new technology, the older systems phase out giving way for new ones.

Cryptocurrency is a digital asset that is based on a network that uses strong cryptographic encryption techniques for carrying out secure financial transactions and is distributed across a large number of computers. Most cryptocurrencies employ decentralized networks based on blockchain technology which means every new block generated must be verified by each node before being confirmed. Simply put, a cryptocurrency is a virtual currency that is secured by nearly impossible to counterfeit cryptography.

Besides being the most secure way to conduct a transaction, it also happens to attract the lowest transaction costs, the prime reason for which is its decentralized system. Unlike conventional centralized systems used by banks, cryptocurrencies make use of each of the nodes to confirm the transaction. The conventional system can also be referred to as master-slave architecture in which the bank is the center of power, hence the master and all users are slaves whereas, in decentralized cryptocurrencies, each node is equipped with equal access to all financial services.

We humans are not exactly fond of change though. Despite the benefits of using a newer system, mass adoption takes a while. Did you know that until 1933, each dollar could be redeemed in gold? Did you know all Americans were required to turn in their gold on or before May 1, 1933, to the Federal Reserve in return for $20.67 of paper money per troy ounce? Yes, it was made illegal to own and trade gold by Executive Order 6102 by President Franklin D. Roosevelt whereas the gold standard was suspended in Britain on September 21, 1931. Many speculate that a similar blow from the government could happen anytime in the future since fiat currencies that are controlled by the government. Cryptocurrencies are global and will not be affected by decisions made by the government of one country or the other.

Currently, there are several thousand cryptocurrencies, Bitcoin, Litecoin, and Ethereum are the most popular ones. Check out this infographic by Total Processing to learn more about other advantages of cryptocurrencies.

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This infographic originally appeared on Republished with permission.

What is Cryptocurrency and How Is Its Global Acceptance

Cryptocurrency in layman terms can be described as a virtual currency that is not controlled by a centralized system. To further elaborate, the crypto in cryptocurrency comes from the word cryptography, which was a practice used during second world war to communicate securely with the use of hard to crack codes that represent critical information. One of the most popular cryptocurrencies is bitcoin which is based on blockchain technology and many other cryptocurrencies are based on the same principle.

Resistance is often the first reaction of masses towards new technology and you will be surprised to learn that electricity, automobiles, and the internet were initially made fun of. Whether it is electrification being called a fad over gas-powered lighting and heating solutions, automobile use disregarded as dangerous over the use of horses, or the scare that internet will be used by criminals, the prime reason for this behavior is the feeling of comfort with the existing system.

There is a lot of confusion around cryptocurrency as there is a lot of skepticism around it. Most people do not understand how it functions and hence they oppose it. Cryptocurrencies are also being blocked by certain countries and centralized banks as they are impossible to monitor and control. Since the transfer of funds can be made anonymously, its use for illegal transactions is seen as a threat.

The positive uses and prospects for the future that cryptocurrency holds outrun the fear and skepticism around it. Value of 1 Bitcoin was less than a cent when it started in the year 2008 and 2009 when the first Bitcoin block appeared. Its value peaked at a little less than $20,000 in December 2015 and 1 Bitcoin is currently valued at approximately $10,000. Want to learn more about cryptocurrency, Bitcoin, and stats on its global acceptance? Check out this infographic from Total Processing to learn about other cryptocurrencies such as Litecoin, Ethereum, and a new one which is yet to be announced from the house of Facebook.