https://www.entrepreneur.com/article/300571
Sunday, October 22, 2017
Cryptocurrency Hitting a New Milestone...but is it safe?
For those unaware of what exactly cryptocurrency means, think of it as any digital currency that can be used for online business without having to be monitored by third parties such as banks. In other words, this is a currency that can be used without regulation. One major benefit of getting rid of intermediaries is that costs of performing trade with others is cut. Think about it, if you want to pay your friend .00006 bitcoin for something you could instantly transfer it to him without any oversight from a bank and without any fees. Every single transaction made would be private and only you would know what the purchase was for and only you could access your funds. How is this possible without having a bank you ask? Well, cryptocurrency like bitcoin have their security invested in what is known as blockchain technology. This technology allows the millions of computers using bitcoin to combine into what is known as the publicly distributed digital ledger. Simply, a bank has one ledger and it is getting more and more likely that hackers would be able to manipulate that ledger to their advantage. That being said, with the publicly distributed digital ledger a hacker would have to hack millions of computers at once in able to manipulate the blockchain. The blockchain acts as a record keeper. Keeping track of when a transaction was made, the amount, and the account numbers involved in the transaction. There are several different safety features in place based on complex math which also guarantee that the chances of manipulating bitcoin is next to impossible. For instance, the blockchain acts as a double check measure in determining which transactions are valid through the use of a private key which is unique to the consumer giving funds to a producer, a coded message which is used as a connector between the two accounts, followed by a public key that the producer would use to unlock the coded message to receive the funds. There have been worries about hackers that would try to duplicate these codes to steal money, but again there are more safety features in place and I will link the YouTube video that explains everything in much better detail. However, cryptocurrency is hitting new milestones as it is being adopted by more individuals, and even companies are investing into blockchain technology to bring cryptocurrencies to the market sooner. Also, in the article tagged onto this post we see that 78.5 percent of Americans have heard of bitcoin with millennials being the most accepting of the change. That being said, bitcoin is worth around 6,000 dollars as of today. Over the last 3 months it has risen over 2,000 dollars. Not to mention Japan is working on legislation to regulate bitcoin, the bank collapse in Greece caused a spike in the use of bitcoin, and legitimization by governments have drove bitcoin to new heights. I do not see this trend slowing down and believe bitcoin is extremely undervalued. Bitcoin and other cryptocurrencies are the future and I highly suggest others begin looking to invest or purchase bitcoins for use.
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Crytpocurrency and bitcoin are very interesting discussion topics. I am a slight believer in the future of bitcoin. I think there are definitely benefits to the encrypted currency, however, it is hard for me to see the reasoning big businesses have to use this form of currency. Also, believers of these forms of currencies are simply putting their trust into lines of computer code written by an individual(s). So while there is no need to trust a 3rd party intermediary or gov't, you still have to trust the programming and the person that coded the entire system.
ReplyDeleteNonetheless, I think cryptocurrency can give small business the power and ability to transact at very low costs. Startups that have tight capital balances, could use these forms of currency to help lower transaction costs.
While Bitcoin and similar crypto-currencies have many benefits, especially in terms of quick trades and reduced brokerage expenses, it could have negative effects on the economy. If Bitcoin were to be implemented, a great deal of people would be left unemployed as banks make up such a large portion of our economy. There are also issues with security in regards to crypto-currency. With that being said, I believe they can be beneficial in the long run and could revolutionize the way we make transactions every day.
ReplyDeleteThe idea to completely implement a cryptocurrency is also very expensive. Hypothetically speaking, if the government decided to go cashless, they would need to find ways to increase their spending, whether it be through tax increases or increased borrowing. Implementing it is very risky as well.
ReplyDeleteCryptocurrency and Bitcoin, in my opinion, is the future. The simple, private transactions can be popular to many. It will be very expensive to start implementing cryptocurrencies, but I believe that even though there are many disadvantages to digital currencies, such as the safety and prices, the advantages outweigh them.
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