Before hitting the subject, let's have a brief idea on the terms - Cryptocurrency and Bitcoin - One of the widely accepted Cryptocurrency!
Cryptocurrency, in the simplest of forms, is the digital currency designed with the ability to send, receive and trade based on the principles of cryptography.
Unlike our printed money, cryptocurrencies are decentralized which means they are in no control of any traditional bank or centralized government. You alone control your cryptocurrency.
The security mechanisms for the transactions and control on the production of new coins are all defined by cryptography which can also be referred as decentralized Blockchain
Blockchain is nothing but a digital ledger in which transactions made in Bitcoin or another cryptocurrency are recorded chronologically and publicly.
There are a number of cryptocurrencies available wherein Bitcoin was the very first cryptocurrency launched by Satoshi Nakamoto on a white-paper. Bitcoin was invented as a peer-to-peer system for online payments that do not require a trusted central authority.
With the passage of time, Bitcoin has gained all the popularity and success beyond it was aimed to. It has grown to a whole new technology and a powerful investment medium.
Now, an obvious thought might be striking your mind - Why the world, really need any cryptocurrency?
As stated by Ben Yu in one of his article, Bitcoin was invented in the aftermath of the 2008 financial crisis, and this crisis was indeed a clear motivating factor for its creation.
Any centralized banking system or institution that holds your money has full control over your assets. For example, When you deposit a certain amount, say 10,000INR, the bank doesn't keep all of that deposition for you, rather it almost invests 90%(roughly) of your deposits and keeps only 10%(roughly) of it for you to be used in liquid form. The same happens with every customer of that bank. So, just imagine, when suddenly a large part of the customers need their money back, will the bank be able to solve their need?
Obviously NO! Hence, The world is in extreme need of a decentralized payment system where only you control your money.
50+ countries have already started facilitating Bitcoin through Bitcoin ATMs which include USA, UK, Spain, Japan, Sweden, Australia and many others. Also, the leading names in the tech industry such as Bill Gates & Sir Richard Branson are highly supporting Bitcoin and the blockchain technology.
July 27, 2017 - Richard Branson’s private Blockchain Summit begins on Necker Island as stated in an article by Jamie Redman on Bitcoin.com. This is the third annual Blockchain Summit and will feature a host of cryptocurrency and blockchain industry luminaries for three days.
Here is a glimpse of the summit 2016:
Real life applications and working of Cryptocurrency
The cryptocurrencies are being accepted as a mode of payment by more and more people around the globe. Hence, it becomes mandatory to know where and how exactly different cryptocurrencies are being used.
Here are some of the other widely used cryptocurrencies:
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. With Ethereum, you can safely do business with a person you don’t know; as all the terms are spelled out in a “smart contract” entrenched in the blockchain.
Ripple is a real-time currency exchange, remittance network, and settlement system. built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP(a payment protocol that functions as a payment system, currency exchange, and a remittance network and works with fiat currencies, cryptocurrencies, and commodities).
Factom is the first usable blockchain technology to solve real-world business problems by providing an unalterable record-keeping system. It stores the world's data on a decentralized system using blockchain technology for smart contracts, digital assets, and database integrity.
Monero is a secure, private, untraceable currency. It is open-source and freely available to all. With Monero, you are your own bank. Only you control and are responsible for your funds, and your accounts and transactions are kept private from prying eyes.
Litecoin is a peer-to-peer cryptocurrency released under the MIT/X11 license. It enables instant, near-zero cost payments to anyone in the world. Litecoin formation and transfer is based on an open source protocol.
Dash is a privacy-centric digital currency with instant transactions. With Bitcoin, transactions are published to the blockchain and you can prove who made them or to whom, but with Dash the anonymizing technology makes it impossible to trace them.
Startups also are coming up with ICO and the Big-Names in the industry are also showing their trust in them
[Image credit: ETHNews.com]
According to a recent article by Mo Marshall on VentureBeat, Blockchain startup Block.one has raised $185 million in just five days of selling its EOS cryptocurrency token. That sum breaks the record Bancor set just a couple of weeks ago with its nearly $150 million raise.
The well known Indian Angel Investor Mr. Sanjay Mehta is backing EOS and is in the managing team of Block.one.
“Block.one intends for the EOS.IO software to support distributed applications that have the same look and feel as existing web-based applications, but with all of the benefits of the blockchain – namely transparency, security, process integrity, speed and lower transaction costs,” according to the company’s press release.
Block.one’s record-setting ICO comes amid a fresh surge in interest in blockchain technology and startups.
CryptoCurrency/Bitcoin Bubble Burst
Cryptocurrency is definitely ‘too big to fail’ but there are some market corrections that can’t be ignored, as people are investing their hard earned money by seeing this as money making opportunity and invests in altcoins without knowing the exact purpose and the team behind that particular cryptocurrency.
According to one of the article by Robert C. Wolcott on the Cryptocurrency Crash, he has very rightly said - “It Never Goes Down - Until It Does”
Bitcoin, Ether and others are real. These methodologies have a powerful future in our global financial system, though no one can predict what that will be. We can, however, confidently predict there will be casualties.
When some of the dozens of cryptocurrency schemes crash, there will be a pain. However, the long-term impact on our economy of these experiments will be positive. The more troubles occur early, the more likely economic actors might successfully climb steep cryptocurrency learning curves.
The opportunity to quickly generate enormous wealth makes investment innovations powerfully attractive — and dangerous.
Most investment innovations are fully digitizable or nearly so, and thus rapidly scalable. When a new financial instrument starts making some money, others pile in. A few early entrants do remarkably well. Later entrants, providers or investors, have to pay a higher price and assume more risk.
So far, this doesn’t appear different from other digitizable business concepts. We’re right now in the late stages of a gold rush for Uber-like models. A few will win and most will fail, and that’s just fine. By contrast, investment innovations can become, in a sense, “too big to fail.”
Lastly, something about the upcoming Bitcoin Fork
The Bitcoin fork that just recently happened on August 1, 2017 will be forcing the split of Bitcoin into two, resulting in a new digital currency, called Bitcoin Cash.
Why is the split happening?
Bitcoins aren’t really feasible for everyday transactions, we’re nowhere near being able to walk into a Starbucks and pay for our coffee in bitcoins.
The main reason behind this split is that the Bitcoin blockchain is slow and expensive. The bitcoin network can process up to six transactions per second, while the VISA network can process over 1600 transactions per second, which is quite faster.
Hence, the general public adoption will result only when the transactions will be as fast and convenient as existing payment networks. Unless that happens, bitcoin will be used mostly as a value storing the vehicle.
Bitcoin Cash(Bcash) buzz
"The creation of Bitcoin Cash is certainly a pivotal moment for Bitcoin and its community," Charles Hayter, founder of digital currency comparison website CryptoCompare, told CNBC on Monday.
"The inception of Bitcoin Cash may prove to be exactly what Bitcoin needs."
Bitcoin Cash will have all the history from the old blockchain. So any investors with Bitcoin tokens will receive the same number of tokens on the new blockchain too. Also, the block size for Bitcoin cash is increased to 8MB.
According to CNBC, Bitcoin Cash will likely only be worth a fraction of Bitcoin. The original digital currency is trading around $2778.39 today, but future values for Bitcoin Cash on the website Coin Market Cap are just $288.35, or 0.103 of a bitcoin.
These are exciting and anxious times for Bitcoin. Bitcoin cash already has a fairly solid wallet and exchange support(visit bitcoincash.org for more details), but the real watch is whether the miners get behind it or not. In any case, it will be quite fascinating to watch the orientation and track of the Bitcoin cash over the coming weeks.
Note: I am not a trader or an active investor in cryptocurrencies. I just personally invested some in the cryptocurrency I believe in :-). I too am exploring the enormous field of cryptocurrency yet, so this article is a summary of all the information I have gathered from various rich resources on the internet. Hope it would have contributed in your knowledge about the subject. Please feel free to share your views in comment section.
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