Cryptocurrency and Traditional Banking

Why are cryptocurrencies growing in popularity? Is it because of nefarious black market connections or is it something else? The answer is surprisingly simple:

When your bank processes all your financial transactions, it verifies them as a central authority. Those verified transactions are listed in a sort of digital ledger. Cryptocurrencies do the same, but instead of being verified by the central authority, the transactions are verified by the computing power of the cryptocurrency miners.

The verified transactions are built into “blocks” that are placed in the blockchain. In the case of currencies like Bitcoin(known as a “proof of work” model), digital currency is released to the miners, each time they build a new block of verified transactions.

In this way, there is no central authority that controls the flow of the currency and/or charges people for their transactions. You can get a digital wallet, that serves as your “bank account” and use it to make transactions without a middleman. You will have a personal “private key” which allows you to access funds sent to the wallet and you can give out “public keys” to other people, through which, funds can be sent to your wallet.

In this way, you can keep your wallet identity private and transfer funds more quickly and easily, with mathematically verified transactions. It eliminates the need for banks altogether. However, adoption of cryptocurrencies is the main reason they haven’t already replaced banking. Many places don’t accept cryptocurrencies as payment.

However, while many places don’t accept payment through cryptocurrencies, you can still acquire a cryptocurrency debit card, that you can use to pay at most stores. It simply converts the cryptocurrency into an accepted currency (usually US dollars) and completes the transaction. There are also other methods of exchanging cryptocurrency, such as paper wallets, that can be used similarly to bank notes(cash). As cryptocurrency is further innovated, we will see much more widespread use.

Please share this post with friends and family. It helps further education about cryptocurrencies, which only helps future adoption. As always, drop a comment below if you have any suggestions or critiques and please upvote, follow, and resteem if you enjoyed the content! Thanks!

- Spacecadet1