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Digital Themes

Cryptocurrency

What is Cryptocurrency?

In the age of digital economy, as financial transactions increasingly become paperless, cryptocurrency seems to gain high traction as the newest form of money for consumers. Cryptocurrency is a form of digital asset, a decentralized currency, that’s not controlled or regulated by any central banking system or financial entity. Like cryptocurrency, there are other forms of digital assets that represent value in encrypted forms – crypto commodities and crypto token.

Blockchain is the key technology that lies at the heart of cryptocurrency. As per the Blockchain Council, “Blockchain is a peer-to-peer decentralized distributed ledger technology that makes the records of any digital asset transparent and unchangeable and works without involving any third-party intermediary.” Individuals willing to make transactions need a digital wallet and a cryptographic key (more like a password). Every time a user makes a transaction, a block is created to represent the transaction and the requested transaction gets broadcasted over a peer-to-peer electronic system to validate the transaction.

The first and the most notable form of cryptocurrency is Bitcoin, launched in 2009, that leverages blockchain technology along with cryptography. Other popular cryptocurrencies include, Ethereum, Litecoin, and Dogecoin.

What are the business benefits involved with cryptocurrency technology?

  • User friendly: for today’s digital consumers, digital transactions of cryptocurrency is quick, real-time, and at the click of a button without the manual intervention of paper-based documents for KYC. As the currency is not regulated by a third-party, there is no dependence on any financial entity or tax-based regulations for cryptocurrency trading.

  • Cost-optimal transaction: As cryptocurrencies are not regulated or bound by third parties, the decentralized nature of the assets makes it cost-friendly with minimum transaction charges as compared to traditional financial transactions that involve high charges.

  • Lesser chance of fraud: as cryptocurrencies are encrypted using blockchain technology, the user details are kept anonymous, thereby making transactions secured
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