As the online world continues to shape how we undertake activities of daily living, the financial sector has not been left behind, with the Cryptocurrency continuing to disrupt our financial transactions proceedings. In the recent past, when the word crypto hit your mind, the first and probably the only thing that popped up was Bitcoin. Today, there are thousands of altcoins in the market, showing how rapid digital currency has grown. If you haven’t joined the bandwagon yet, here is a look at are a few concepts to ease your endeavors.
Common terms
- Altcoins: It simply means alternative coins; in other words, any other cryptocurrency besides Bitcoin.
- Cryptography: This is the process of deciphering or writing in a code, a type of mathematics creating a secure online environment and transactions.
- Blockchain: This is the public record utilized to verify all digital currency (Cryptocurrency) transactions, recorded on blocks that are regularly added, typically after set minutes.
- Mining: Mining is the PoW (proof of work) process where miners solve a math problem to validate cryptocurrency transactions. The calculations increase the transparency, value, and security of Cryptocurrency, and in return to your mining efforts, you get Cryptocurrency.
- Nodes: Computers that are parts of the global cryptocurrency blockchain network responsible for verification of the transactions recorded. For a transaction to be successfully verified, multiple nodes validation is required.
- Private Key: The secure password giving a cryptocurrency owner access to their wallets.
- Public address: It is like a physical property address or an email address and the only public-facing data on the blockchain, with each transaction using a unique address. You need a recipient’s public address to send Cryptocurrency.
Before you invest in Cryptocurrency, you might have a few concerns. The security, and perhaps the most debated matter, is an element that attracts and repels users in almost equal measures. Cryptocurrency transactions are secure and private, creating an effective and affordable platform, especially noting the low transaction costs compared to other payment gateways and banks. It has, however, been argued that its anonymity attracts less-than-legal uses, increasing the risks of scammers targeting unsuspecting users. With the ever-growing cyber threats, moreover, it is seen as a vulnerable currency, especially as more users continue to take favor in mobile devices that can be compromised physically or digitally.
Volatility is another concern that is, especially, a noteworthy concern for those intending to engage in crypto trading. Cryptocurrency is highly volatile, meaning that you can enjoy high-yields, but the risk is high, and you could lose your investment in a blink of an eye. This attracts many risk-takers, but could also repel enough people, lowering its value. Also, the currency is decentralized, meaning that financial institutions don’t control it but only monitored by peer-to-peer internet protocol. This eliminates currency hiccups, including corruption, making Cryptocurrency a global currency. As Cryptocurrency is released into the economy via mining, and as there is a set limit of what can be mined and circulated, it is quite inflexible, meaning that there is no room for inflation.
Cryptocurrency has opened up numerous opportunities on a global scale. While it might sound complicated, it is quite simple, and you don’t have to be a tech-savvy person to access the digital currency.
