What is Cryptocurrency: the 21st-century unicorn?

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  • Last Updated July 06, 2017

What is a 'Cryptocurrency'?

A cryptocurrency is a virtual currency that uses secure cryptography. The defined feature of a cryptocurrency, is its organic nature. It doesn’t deal with any involvement of a centralized authority, rather functions through the computer of a user.

Breaking Down 'Cryptocurrency'

Cryptocurrency transactions are well-suited for activities, such as money laundering and tax evasion.
The first decentralized cryptocurrency launched was Bitcoin, during 2009. The decentralized means the use of bitcoin's blockchain transaction database instead of a distributed ledger.
Since then, numerous cryptocurrencies like PPCoin, Namecoin, and Litecoin have been created.
There are more than 700 cryptocurrencies available in online markets for trade, as of early 2017.

Cryptocurrency Benefits and Drawbacks


Transfer of funds among different parties are made easier with Cryptocurrencies.
Transfers are conducted through public and private keys upholding security issues.
Funds are relatively transferred with minimal processing fees.
Cryptocurrencies are potential enough to lower transaction costs and make the process of payment more efficient.


As Cryptocurrencies are virtual and does not possess any central repository, any balance sheet might get wiped out (when a computer crashes) until and unless a backup sheet of the holdings does not exist.
The rate of cryptocurrency might fluctuate widely depending on supply and demand.
Cryptocurrencies might sometimes suffer to the threat of hacking.

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What is the future of Cryptocurrency?

The market of cryptocurrencies is fast and wide. Every day, new cryptocurrencies emerge, old die, early adopters get wealthy and investors lose money.

Cryptocurrencies are gaining legitimacy as a protocol for business transactions, micropayments, and overtaking the popular remittance tools.  

People all over the world buy Bitcoin to protect themselves against the devaluation of their national currency. Mostly in Asia, a vivid market for Bitcoin remittance has emerged, and the Bitcoin using the darknets of cybercrime are flourishing. More and more companies discover its power and adopting this emerging technology.

The revolution is already happening.

Institutional investors start to buy cryptocurrencies.
Banks and governments realize that this invention has the potential to draw their control away.

Bitcoin is the way out, and cryptocurrency as A whole is never going away, it’s going to grow in use and acceptance as it matures.

Why Use Cryptocurrencies?

Instead of depending on a centralized financial institution to execute and verify transactions, cryptocurrency transactions are "confirmed," by the computers itself within the currency's network.
As cryptocurrencies are digital, they can be used in numerous ways that ordinary currencies can't.
A very small fee is charged for each transaction.
They represent things like consumer goods and domain names.
Cryptocurrencies can be transacted irrespective of any city or country, enabling users to deal directly, rather than through a third-party financial institution.
Cryptocurrencies are generally safe to use and hard to steal by malicious hackers.
Prominent cryptocurrencies are Bitcoin, Darkcoin and Nxt.

Cryptocurrencies: What to Look For

The main characteristics to consider in Cryptocurrencies are.

  • Market Capitalization and Daily Trading Volume

A cryptocurrency's market capitalization denotes the complete worth of all coins in existence.
Daily trading volume: it is the value of the coins that exchange hands every day.

  • Verification Method

Instead of employing the oldest and most common method like proof of work, which requires a massive amount of energy, Proof-of-stake systems lets users verify the transactions. This methodology requires less processing power to operate and claim transaction speeds quicker.

  • Retailer Acceptance

Every user must equip with the knowledge of where a cryptocurrency can be used, before investing on it.

A few cryptocurrencies are widely accepted, among major retailers. However, many have limited acceptance, and can only be exchanged for other cryptocurrencies. Some coins are specifically designed to fulfill variant purposes.

Final Thoughts…

Cryptocurrencies are an exciting new development in the world of finance. No one is quite sure yet where the technology will lead, but the fact remains that these new currencies offer possibilities that traditional cash can't.

Today cryptocurrencies have become a global phenomenon known to most people. Many people, banks, governments, and companies are aware of its importance.

Cryptocurrencies have emerged as a hope that there is a currency which preserves value, facilitates exchange, and is entirely out of the influence of centralized banks and authorities.

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