We are all familiar with the term currency and its usage. It is commonly understood as a piece of paper that acts as the basis of all financial transactions for a country.
In the UK, it is known as Pound Sterling. In the USA, it is US Dollars; Ireland uses Euros like most of Europe. Every country has a different currency that is decided by the country’s economic health.
All of our lives, we have been so used to the paper currency, which is tangible as the sole means of financial exchange. Even the cards and virtual wallets that we use operate in the same units. So, to think that all over the world, a new form of currency would take over the entire world as a standard unit of currency seemed slightly preposterous.
However, this has happened. Let us try to dissect the meaning behind it.
THE MEANING OF CRYPTOCURRENCY
A cryptocurrency is a digital unit of currency that allows the holder to perform a financial or banking transaction without actually possessing the tangible kind of money. So, it is a form of electronic cash.
- A cryptocurrency does not come under a country or a central bank; instead, it operates independently through decentralised channels. The currency’s user and its inbuilt code dictate its value, which is unlike the fiat currency.
- It can be used for all forms of financial transactions, provided that the country allows it. Some countries like Algeria, Egypt, Bolivia and Ecuador have a total ban of cryptocurrency’s usage, while China, Columbia, Russia and Saudi Arabia have a banking ban on these.
- A cryptocurrency’s transactions are protected by strong cryptography. It means detecting the currency exchange is almost impossible if you do not have access to the blockchain, which is a kind of ledger holding the transaction records.
- The cryptocurrency promotes the safety of the user but makes it difficult for the governments in the know of any illegal dealings.
Many consider this form of currency to be the future of every financial transaction. With its heightening popularity, it can very well be it.
Many think that the concept of cryptocurrency came along in 2009 with the inception of Bitcoin. However, this had been developed decades before that.
Cryptocurrency came into being with an American cryptographer named David Chaum in the early eighties. By the end of the decade, he had fully operational electronic money called Digicash. He and his company, set up in the Netherlands, wanted to deal directly with the public, but the central bank did not allow it.
THE FLAG BEARERS
Then in the late ’90s, two more cryptocurrencies were launched.
One was by a software engineer Wei Dai, who develop an electronic medium for the exchange of this virtual currency. Even though his innovation was never used for actual financial dealings, he is responsible for the creation of the blueprint that was used by later cryptographers to develop future currency.
In Florida, a company by the name e-gold was established. It created a virtual currency that was calculated on the ounces of gold. People would send their gold jewellery to the company and receive e-gold based upon the value of their gold.
The e-gold became so popular that its yearly transactions were in billions. However, its security measures were not up to par, and consequently, it had to wind up its operations in 2009. The developer had made exorbitant earnings that he would not be looking for loans for people on benefits anytime soon.
CRYPTOCURRENCY IN THE PRESENT
It was the creation of Bitcoin in 2009 by the pseudonym Satoshi Nakamoto was brought the attention of the world towards cryptocurrency.
A Bitcoin is a form of asset in the digital sense that acts as an alternative to the fiat currency. The definition is the same as that of cryptocurrency because it is one.
The astounding thing about the Bitcoin is its staggering growth.
- In March 2010, the Bitcoin’s valuation was at $0.003, which nothing.
- By June of 2011, it was valued at $31. The growth was beyond anyone’s expectation.
- 2013 was the year Bitcoin starting gaining fame all over the world, with the highest value noted at $1242.
- In October of the same, the world’s first-ever Bitcoin ATM was launched in the Waves coffee shop in central Toronto in Canada. This ATM gave the option of to anyone to deposit cash and buy as many Bitcoins as he pleased.
- Till today there are 6689 Bitcoin ATMs in over 70 countries, with 42 companies producing them.
- Bitcoins highest value was recorded on 17 December 2017 at a mind-boggling $19,783.06.
- As of 2020, the value of the Bitcoin is 9039.54 USD, which equals to 7281.25 Pound Sterling.
Some who had bought Bitcoins in its initial stage for under a dollar would be enjoying the fruits of his investment for a long-long time, without ever facing the dilemma of opting for same day loans.
To say that cryptocurrency is our future is like stating a fact. With more than a dozen operational and profiting currencies that most governments allow to be used as a medium of exchange, there is no going back from this development.
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