Blockchain Wars, How It May Revolutionize The Currency

The new talk of the town when it comes to currency is crypto. Be it business tycoons, the common person, or even entire governments of various countries, everyone has touched on this topic at least once in the last few months. Let’s know what’s so interesting about this emerging technology in this article.

Be it the marvellous Bitcoin, the emerging Ethereum network, or the underdog Solana, they all are quite popular nowadays and you can hear someone talk about the cryptocurrency market at least once during the day.

Starting with the definition of cryptocurrency, we term it as a virtual currency that is secured by some form of encryption and is configured to work as a medium of exchange wherein the ownership is saved in the form of blocks and stays on the blockchain (defined later) forever as a receipt.

So, let’s get to know more about blockchain and cryptocurrency in brief:

A blockchain is a form of technology wherein you store every form of action in a block that is accessible to various users, thereby removing multiple forms of discrepancy and fraud. Whenever you act on the blockchain, a block of data gets registered which is then verified by various other users and only then does the action gets completed successfully. So, Cryptocurrency acts as the monetary medium in blockchain many times and all Coins (The cryptocurrency monetary format) are stored in the blockchain with encryption ranging from various hash code combinations.

The blockchain is also a decentralized platform, meaning no true owner exists for the same and that all data is visible to everyone thereby hindering the governments from having control over the currency of a country. This seems to be a matter of worry for some governments while some are welcoming this wholeheartedly. The use of blockchain technology in the finance sector removes the ruling government from having the power to use the currency to their own will and allows the users of the blockchain to be the ones determining the value of the currency in use.

Coming back to cryptocurrency, the cryptocurrency tycoon began during the covid crises of 2020 when Bitcoin began its rally and attained an all time high of over 40K Dollars and since then many more investors have stepped into the field to have their own share of the pie. However even if the topic of cryptocurrency seems all fairytales and cupcakes, not all who have invested into this market have yielded profits. The crypto market consists of a very volatile valuation and thus the price falls and rises abruptly from time to time leading to a destabilized form of currency in the minds of many.

As per many experts, the following points are to be maintained by any currency to have its identity as a crypto currency:

Absence of any centralised authority and is maintained through distributed networks

The system maintains records of cryptocurrency units and who owns them

The system decides whether new units can be created and in case it does, decided the origin and the ownership terms

Ownership of cryptocurrency units can be proved exclusively cryptographically.

The system allows transactions to be performed in which ownership of the cryptographic units is changed.

Moving on to the Advantages and Disadvantages of Cryptocurrency:

Advantages:

The transactions are completed with the utmost security and are verified by multiple sources thereby removing any discrepancy and fraud

There is no need for a third party to facilitate the transaction and two parties can easily transfer funds between them

The modern crypto wallets are secured with state-of-the-art technology and thus the funds of the user are safer than many banks and financial institutions

The processing fees for large and small transactions remain rather low and without external influence

Since the prices are volatile, one can invest wisely and make multi-bagger returns in the future

Disadvantages:

Since the platform is decentralized and anonymous, many illegal transactions are being carried out in this form and this seems to be a serious problem in this field

Payments are final once done and cannot be reversed

They have a limited acceptance rate as many people and governments are cautious about the use of crypto as a form of currency but this is being removed day by day

The price of crypto coins is volatile and thus one may also face ginormous losses while investing in the wrong type of coins with weak fundamentals

That sums up the article on cryptocurrency for the day, stay tuned for more updates on cryptocurrency as more governments are changing their perspectives towards cryptocurrencies and accepting them as a form of currency as the day passes.