A Brief Introduction to Cryptocurrency
Before getting into the specifics of how cryptosystems work, it’s important to first define what it is. Cryptocurrency is any digital item that is issued and traded without the use of a conventional money unit. It can be thought of as digital gold or currency, but instead of being issued by governments or other monetary institutions, these types of assets are “oledited” by users on the Internet. Olled entities include individuals, companies, and even groups. The issuance of this type of digital currency occurs in much the same way that regular currency is issued.
How the supply chain for cryptosystems works largely depends on the kind of currency being used as well as the incentive system that are employed by those issuing the coins. For instance, if a company decides to create a new type of virtual currency, it will likely need to first receive an initial deposit from the “miner” or group of users who will in turn contribute to the mining of the new asset. The more users who contribute, the more the value of the asset can increase. Once enough of the initial pool of users have contributed, the remainder of the pool becomes available for transfer and later, transfer into the real world. This is often done by “pooling” funds; meaning one entity pooling money and then spreading it throughout the network, similar to how banks insure millions of dollars of financial assets through large multi-million dollar trades.
One of the major benefits of using Cryptocurrency as opposed to traditional means of money like a bank account is the lack of need to trust external third-party organizations with the highly sensitive personal information that goes into creating these types of assets. Another benefit is that there is no necessity for a third party to provide any kind of collateral to participate in the trade. This prevents third parties from taking control of the money, which in many ways makes Cryptocurrency much more resistant to manipulation. Lastly, users do not need to share their personal financial information with anyone else outside the network which further protects their privacy and ensures their security.
October was known as “the month of crypt”. October is when most major news stories were released with the Cryptocurrency market largely unaffected from any economic or political events going on elsewhere around the globe. This was a major departure from how the news industry normally operates which normally focuses on some type of event that is occurring outside of the country where the news was being reported.
The major attraction of Cryptocurrency to investors is its ability to be traded anonymously and globally. Transactions can occur in real time and are not limited to a certain time zone or region. This is in contrast to traditional methods of trading which usually involve transactions being made within certain time zones or regions. For example, most stock market transactions have been held over a fixed time frame where the markets typically open before the weekend, then close during the night on the weekend. With Cryptocurrency, there is no physical location where trades are made; instead, investors can trade anytime they like 24 hours a day.
In summary, if you want to invest in Cryptocurrency there is a lot more to understand than what has been written above. There is still a lot of research that needs to be done on Cryptocurrency itself. The bottom line is that the developers of Cryptocurrency are engaged in research to find ways to increase the amount of decentralization in the system, and create a global marketplace where investors from around the world can participate. Once the developers successfully complete these projects, then we will have a very powerful and viable form of Cryptocurrency that will change the way people think about payments and how easy it is to use this new technology for everyday transactions.