CRYPTOCURRENCY AND BLOCKCHAIN - HOW TO UNDERSTAND THE DIGITAL ASSET? – Island Echo
Cryptocurrencies have long been part of our financial universe. However, it is still difficult for many people to understand what these digital assets do and whether we should be positive or skeptical.
When Bitcoin was first introduced in 2008, much of the world saw it as a joke. However, the cryptos and bitcoin increased significantly in popularity and value. Since then, bitcoin has reached extreme heights and a thousand more cryptocurrencies have seen the light of day. Today, there are over 20,000 different cryptocurrencies in the world.
And although some are still skeptical, investing in cryptocurrencies has become more and more common and now it is even possible to use this currency as payment in specific transactions. So, what is this world of cryptocurrencies and blockchains, and how has it changed our financial situation?
Understanding the cryptocurrencies
It can be difficult to understand what technology is behind this digital revolution. And it should be taken one step at a time if you want to understand this complex world of crypto. Bitcoin was the very first cryptocurrency to be introduced and it is still the most famous and popular crypto. And at today’s value, it is completely impossible for someone with an average income to come close to buying a bitcoin.
Bitcoin courses have long been available to those who want to know more about this specific cryptocurrency. And it’s pretty interesting, so the fascination makes sense. The cryptocurrencies are all strictly digital assets, meaning they do not exist anywhere but digitally.
This is what made them difficult for many to understand. How can something strictly digital become of such value? And this is still a great question with very different answers. Those who are positive about crypto will say that the future is digital, while the skeptics cannot see a future for this type of currency.
Blockchains – advantages and disadvantages
The technology behind cryptocurrency is called blockchain. And this is what makes them so difficult to understand in addition to presenting a technological revolution. Blockchains are a great digital chain of data connectivity and it requires a huge computer to produce blockchains.
However, what makes blockchain interesting is that you can make transactions without an intermediary. No bank or other institute can be involved in a transaction as it only happens between the buyer and the seller. Make it a more private type of interaction and make it impossible for the banks to follow the customer’s financial flow.
Those who are positive about crypto see this as a way of disposing of the bank’s power. The worrying thing about this type of technology is that it can be used to support or transfer money to criminal causes without ever being traced as there is no control over the transactions. Although blockchains make transactions much safer, they have their problems.
