Cryptocurrencies also referred to as digital coins, digital currency or altcoins are the latest big thing in the world of finance. Like fiat or paper money, they can be used as a mean of exchange. They are irreversible, pseudonymous, fast, global, secure and permission less. These new forms of money are decentralized; this means that they are not regulated by any central body like the central bank or government agencies. To define cryptocurrency in a more comprehensive term; it is a medium of exchange, created and stored electronically in the blockchain, using encryption techniques to control the creation of monetary units and to verify the transfer of funds, Bitcoin is the first and best-known example. Cryptocurrencies are regulated by the principle of cryptography, a principle that works by controlling the process of digital currency creation as well as ensuring the security of transactions carried out with the cryptocurrency. Unlike gold that is mined from the ground, cryptocurrency is an entry in a virtual ledger that is stored in various computers around the globe. These entries have to be ‘mined’ using mathematical algorithms, and individual users or a group of users then run computational analysis to find a particular series of data, called blocks. A continuous link of these blocks is referred to as blockchain. Blockchain helps to keep records of all transactions that take place across the peer-to-peer network and it is this major innovation that allows the transfer of assets without the interference of a centralized third party. This is the technology underlying Bitcoin and other cryptocurrencies, and it has the potential to turn global transactions into something simple and straightforward. Looking at it from the business perspective; blockchain technology is a type of business process improvement software, a form of collaborative technology that promises the ability to improve business processes and transactions between two entities and radically lowers the need for trust.
Blockchain technology has been around for a while, and more recently, numerous financial institutions, companies, and governments have begun exploring the potential use cases, along with the benefits associated with distributed ledger technology.
Following the appearance of Ethereum, people have begun to explore the potential uses of smart contracts. For those who do not know, smart contracts are computer programs capable of controlling digital assets by following the conditions set in place by prior agreement between two or more parties.
Traditional contracts work by outlining the main terms associated with a relationship between two or more parties, usually enforced by the law of the state that they’re being signed in. On the other side of the spectrum, smart contracts don’t set the terms, but instead make sure that once all conditions are met, they self-execute, thus removing the need of a middleman when carrying out various types of transactions.
The potential uses of smart contracts includes storing records, trading activities, automating mortgages, supply chain, real estate etc
The potential of smart contracts is virtually limitless, as they can easily automate a wide variety of industries, thus saving people time and money, while also improving security.
Conclusion – The Arrival of a New Age
Today, everyone is talking about cryptocurrency, it taking the world of currencies by storm, relegating fiat or paper money to the background. Cryptocurrency is now mentioned in the news daily as it surpasses major world currencies in value. It is now widely accepted across the globe as a means of payment and exchange.
One thing that makes cryptocurrency very powerful is that it is decentralized and gives power to the people rather than the government and the diabolical oligarchs. Since anyone does not control the inception of its circulation, it remains a threat to the government, the globalists, and the world banking system. The future of money is here, although a lot is yet to unfold in this regard. Already used for online purchases or exchanged into paper money, cryptocurrency ATMs are now available too. These digital currencies have already been adopted by big e-commerce players and many Fortune 400 companies.
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Oliver, d (2017, November 8). Cryptocurrency guide part 4: what are smart contracts?. Retrieved from https://blockonomi.com/what-are-smart-contracts/