CRYPTO-CURRENCY:

A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies. 

HOW IT WORKS ? FURTHER EXPLANATION:

Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers. In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.

WHICH IS THE FIRST CRYPTO-CURRENCY ?

Bitcoin became the first decentralized cryptocurrency in 2009. Since then, numerous cryptocurrencies have been created. These are frequently called altcoins, as a blend of bitcoin alternative. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is related to the use of bitcoin's blockchain transaction database in the role of a distributed ledger.

ADVANTAGES OF BITCOIN

Freedom in Payment

• With Bitcoin it is very possible to be able to send and get money anywhere in the world at any given time.
• You don’t have to worry about crossing borders, rescheduling for bank holidays, or any other limitations one might think will occur when transferring money.
• You are in control of your money with Bitcoin. There is no central authority figure in the Bitcoin network.

Control and Security

• Allowing users to be in control of their transactions help keep Bitcoin safe for the network.
• Merchants cannot charge extra fees on anything without being noticed. They must talk with the consumer before adding any charges.
• Payments in Bitcoin can be made and finalized without one’s personal information being tied to the transactions.
• Due to the fact that personal information is kept hidden from prying eyes, Bitcoin protects against identity theft.
• Bitcoin can be backed up and encrypted to ensure the safety of your money.

Information is Transparent

• With the block chain, all finalized transactions are available for everyone to see, however personal information is hidden.
• Your public address is what is visible; however, your personal information is not tied to this.
• Anyone at anytime can verify transactions in the Bitcoin block chain.
• Bitcoin protocol cannot be manipulated by any person, organization, or government. This is due to Bitcoin being cryptographically secure.

Very Low Fees

• Currently there are either no fees, or very low fees within Bitcoin payments.
• With transactions, users might include fees in order to process the transactions faster. The higher the fee, the more priority it gets within the network and the quicker it gets processed.
• Digital Currency exchanges help merchant process transactions by converting bitcoins into fiat currency. These services generally have lower fees than credit cards and PayPal.

DISADVANTAGES:

Lack of Awareness & Understanding

• Fact is many people are still unaware of digital currencies and Bitcoin.
• People need to be educated about Bitcoin to be able to apply it to their lives.
• Networking is a must to spread the word on Bitcoin.
• Businesses are accepting bitcoins because of the advantages, but the list is relatively small compared to physical currencies.
• Companies like Tigerdirect and Overstock accepting Bitcoin as payment is great. However, if they do not have a knowledgeable staff that understands digital currencies, how will they help customers understand and use Bitcoin for transactions?
• The workers need to be educated on Bitcoin so that they can help the customers. This will definitely take some time and effort. Otherwise, what is the benefit of such large companies accepting Bitcoin if its staff doesn’t even know what digital currencies are?

Risk and Volatility

• Bitcoin has volatility mainly due to the fact that there is a limited amount of coins and the demand for them increases by each passing day.
• However, it is expected that the volatility will decrease as more time goes on.
• As more businesses, medias, and trading centers begin to accept Bitcoin, its’ price will eventually settle down.
• Currently, Bitcoin’s price bounces everyday mainly due to current events that are related to digital currencies.

Still Developing

• Bitcoin is still at its infancy stage with incomplete features that are in development.
• To make the digital currency more secure and accessible, new features, tools, and services are currently being developed.
• Bitcoin has some growth to do before it comes to its full and final potential.
• This is because Bitcoin is just starting out, and it needs to work out its problems just like how any currency in its beginning stage would need to.

Content Original Owner::>>  https://en.wikipedia.org/