eBusiness Weekly
Dr Keen Mhlanga
The digital revolution, which is currently at its apex, is a transition from analogue and electrical technology to digital technology. Because we live in the digital age, it is only natural that a digital form of money, called cryptocurrency, should emerge.
Cryptocurrency, as a digital form of money, operates through a process known as cryptography.
Cryptography is the technique of converting readable information into codes that cannot be broken. The digitised so-called is the foundation of Bitcoin. Blockchain is the central database for all cryptocurrency transactions.
Many invest in cryptocurrencies because they believe that as demand for a specific coin increases, so will its value. In theory, if both businesses and consumers perceived Bitcoin to be a better buying experience than using the US dollar, the consumer might convert more of their money from dollars to Bitcoin, while the business would welcome more Bitcoin payments.
The global crypto market capitalisation is USD1,23 trillion. Over 22 000 cryptocurrencies are publicly traded, and while some have total market prices in the hundreds of billions of dollars, others are obscure and basically worthless.
The network effect of user adoption, in particular, has the potential to play a significant impact in the pricing of cryptocurrencies. Because Bitcoin adoption generates positive network externality, cryptocurrency values respond to user adoptions. As a result, changes in Bitcoin network user acceptance may contribute to price fluctuations.
Crypto transactions can be completed quickly, at a cheap cost and in a somewhat private setting. Almost anyone may send and receive Bitcoins using a smartphone app, hardware wallet, or exchange wallet. Some cryptocurrencies, such as Bitcoin, Litecoin, and Ethereum, can be bought with cash at a Bitcoin ATM.
Because a bank account isn’t necessarily required to utilise cryptocurrency, someone may buy Bitcoin with cash at an ATM and then transfer the coins to their digital wallet or phone. This might be a significant benefit for people who do not have access to the regular banking system.
Decentralised cryptocurrencies are secure forms of payment since they are based on cryptography and blockchain security. As a result, the relative security of cryptos may be one of the most significant advantages for users. Crypto security is heavily influenced by hash rate.
The greater the hash rate, the greater the computational power necessary to breach the network. Bitcoin is regarded as the most secure cryptocurrency due to its higher hash rate than other networks. However, keep in mind that using a crypto exchange is only as secure as the exchange itself. The majority of crypto hacking events include exchanges getting hacked or consumers making blunders, such as falling for phishing scams.
Certain cryptos can be tailored to individual projects or applications. Some cryptocurrencies, for example, are intended to operate with metaverse projects or games and can be used to help produce in-game assets or tokens.
Some Bitcoin initiatives take steps to become more resource-intensive or efficient. That’s a significant contrast from, say, the traditional banking system, which is frequently stuck with outmoded technologies and procedures. A prime instance is “The Merge,” in which Ethereum switched from a Proof-of-Work to a Proof-of-Stake paradigm, effectively halting mining activities and replacing them with a considerably more efficient operational model. Cryptos have another edge over regular systems because of their potential to change things up dramatically and on a large scale.
Of the most significant advantages of cryptocurrency is that it can be used to trade value between two parties. This can be done without the involvement of a third party, making the transaction as free as it gets. It’s like handing a single dollar bill to a stranger on the street.
Banks or other payment processors have the right to refuse service to anyone for any reason. This can make life tough for journalists, political dissidents, and anyone operating in countries with oppressive governing regimes. Because there is no centralised body overseeing Bitcoin or most other cryptocurrencies, it is extremely difficult to prohibit their use.
Cryptocurrencies are not bound by national borders. A person in one country can send coins to someone in another country with little difficulty. Traditional banking services might take a long time and charge high costs to transfer funds across international borders. In some circumstances, this may be impossible due to legislation, penalties, or conflicts between countries. However, Bitcoin circumvents all of this because users can conduct peer-to-peer transactions from anywhere in the world.
Mineable cryptocurrencies with a finite supply constraint, such as Bitcoin, Litecoin, and Monero, to name a few, were once regarded to be good inflation hedges. Because monetary inflation can occur when central banks and governments print more money (increase the supply), scarcer items tend to grow in value.
With more and more fresh dollars chasing fewer and fewer coins, the price of these fixed-supply coins in dollars is more likely to rise.
Furthermore, the Bitcoin system, for example, is designed to keep those coins scarce regardless of monetary policy changes.
The greatest aspect about digital currencies is that they are available all over the world. Various companies all over the world see it as a suitable place to invest. As a result, its use is rising at a quicker rate than before. It is one of the key causes for the growth of the Bitcoin business.
You will be astonished to learn that many organisations and corporations have reaped numerous benefits from the use of cryptocurrency. We cannot claim that all businesses have accepted them as a form of payment. However, the figure is increasing over time. More expansion is likely in the future.
Everyone knows that all countries have convenient financial services. In other words, such underbanked countries are not economically prosperous. As a result, they became unable to provide loans or other services to the public.
However, with the introduction of digital currencies, the world has changed dramatically. People can now invest in them and receive financial assistance in times of need. Not only may they benefit individuals, but they can also help poor countries improve their economy if they begin to use cryptocurrencies.
Another reason people utilise this sort of currency is the anonymity it provides. They don’t need to provide much information about themselves to begin trading. Every cryptocurrency exchange protects its users’ anonymity. As a result, no one will be able to misuse your sensitive information.
With fewer details, you may rest assured that no one will discover your identity. No matter what, banks do not provide this type of reward to their customers. It is only possible with cryptocurrencies. Nobody can find out how many virtual currencies you earn or anything else if you are anonymous.
Among the most appealing aspects of using cryptocurrency is that you can readily access all transactions.
Fraudulent behaviours are less likely. The system records every transaction. As a result, you can track everything without any complications or problems.
Cyberattacks are becoming more common as the world becomes more digital. Because of this, people are constantly hesitant to conduct online transactions. However, this is not the case with virtual currency.
Many financial experts say that these currencies enable users to locate all precious and current transactions. Nowadays, digital wallets are available to expedite the process of sending or receiving virtual currencies.
Technology is improving all the time. That is why the majority of enterprises and corporations are now conducted online. As a result, the risk of being hacked has become more widespread these days.
The Bitcoin business is doing an amazing job of offering investors with strong security alternatives.
Nobody can be hacked if blockchain technology is used. They only need to worry about how to employ these security solutions.
