What is cryptocurrency? Advantages of using Cryptocurrency? why cryptocurrency? Blockchain network? Mining? Bitcoin? by Kahoo Designs.
In this article, we will describe cryptocurrencies. We will also identify the advantages of employing cryptocurrency instead of normal physical currency. So what is cryptocurrency? It is a financial completely decentralized platform that means it is not under the supervision of any country, any central bank, or any monetary authority. Now, let’s understand cryptocurrency. It is a digital currency that can be used for trading between the two parties by using a financial decentralized platform without the intervention of a third party like any country or bank.
The most important question that arises is that how cryptocurrency keeps a check on the transaction made by its clients
Firstly all the account details are managed, controlled, and maintained by a peer-to-peer computer network which is developed by machines or more technically nodes. This process of maintaining and keeping a record of each and every transaction made between the parties through a digital database called ‘a distributed public ledger is called a blockchain.
Cryptocurrency is fully secure because it is digitally recorded and checked and confirmed by a process called mining.
It is the process of recording and checking all information entering into the bitcoin blockchain. Through highly complex digital code which is running on the network. The blockchain network verifies all the new transaction record into the digital database and also modifies it if there is any.
There are different types of cryptocurrencies Like Bitcoin and Ethereum. Bitcoin was the first decentralized blockchain financial platform developed by an individual named Satoshi Nakamoto in 2008.
Now let’s discuss the advantages of using cryptocurrency like bitcoin instead of fiat currency for trading and business.
Advantages of Cryptocurrency
In general business money dealings, there are lots of people involve whom you have to pay like there may be brokers, agents, and legal representatives you have to pay. On top of that, there will be broken fees and commissions added in the pay which makes this straightforward transaction bit complicated with a number of other particular conditions may be applied.
One of the benefits of using this currency as a mode of payment is that cryptocurrency payment will be one to one affair which takes place on peer to peer network structure that removed the middle man. That brings clarity in making audit reports. It also reduces confusion over which part should pay whom. So you can say that there will be more checks more accountability as the two parties involved in the money transactions know each other who they are.
Easier International Trade
Cryptocurrency is not permitted as the legal currency for trading in so many countries. Still, if two countries are performing money dealings, their transactions are e not subject to the exchange rates, interest rates, transactions charges, or other levies imposed by a specific country.
In addition to that as cryptocurrency used a peer-to-peer mechanism of blockchain technology. So there will be no issues in cross-border transfers and transactions over currency exchange fluctuations.
All the transaction made between the two-party by using cryptocurrency is recorded and maintained in a public ledger. All entities of coin owners are encrypted to make sure that all the transaction records are fully secure as the currency is decentralized, you own it. And no bank or monetary body is checking and maintaining the transaction ledgers.
The salient feature of cryptocurrency trading is individual ownership. In a traditional banking or credit card system, funds can be easily taken over by a third party .Your bank account can be closed without prior notice as per the terms and conditions of the banks. So as an account user you have to go through a hectic procedure to get yourself back on track.
Whereas in cryptocurrency the sole owner of your public or private encryption keys that constitute your cryptocurrency network identity or address.
In traditional banking, if you observe the bank or credit monthly statement you can view lots of bank charges like fees imposed by the bank for writing checks and transferring funds. These fees will add to bring significant amount especially if you are performing lots of bank transfers in a month. On the other hand data miners that generate Bitcoin and other cryptocurrencies. Get their compensation from the cryptocurrency network without any fee involved.
There may some an external fee if you hire a third-party management service to maintain your cryptocurrency wallet. Another advantage of cryptocurrency is that even if you add this external fee. It will still be less than the transaction charges from the banks.