Most of us have heard of cryptocurrency and how it’s changing the face of money; however, we’ve also heard of cryptocurrencies rising and falling. Some people have even said that you stand a better chance of getting rich with NASCAR betting odds.
In today’s article, we look at cryptocurrency from a practical perspective and see if cryptocurrency is a practical means of exchange in today’s world.
What is Cryptocurrency?
Before we look into the practicality of cryptocurrency, we need to have a clear understanding of what it is and how it operates.
Cryptocurrency is a digital means of exchange that many use to receive and make payments and wheel in some income. It needs to be understood that cryptocurrency, like normal money, has many currencies attached to it. You can find currencies such as Bitcoin, Ethereum, and many more, all falling under the bracket of being a cryptocurrency.
Many have fallen in love with cryptocurrency for many reasons; however, what stands out the most is its safety and security. We can attribute the safety and security of cryptocurrency to what is called cryptography.
Cryptography is also commonly known as cryptology; however, it’s the study of certain techniques used for secure communication in the presence of adversarial behavior. In simple terms, cryptography is a study of communication that allows only a sender and receiver of a message to view the contents.
This term is commonly used in cryptocurrency and is one of the most important terms. When people refer to a blockchain, they refer to a system.
This system is used to record transactions that are made within cryptocurrency. This system is maintained within several different computers, and in many cases, blockchain is used within a peer-to-peer network.
Is Cryptocurrency Practical?
The truth is that the world is changing at a fast pace.
Transactions are happening daily and across the world. People are always looking for better ways to handle their money and make quicker transactions, and in this manner, cryptocurrency seems like a practical solution, or is it?
A few governments and banks do not think so. This is because cryptocurrency is decentralized.
This means that the power is not in the hands of one particular person or group, making it hard for the government to have any control over cryptocurrency. A few countries have looked at cryptocurrency as an asset, meaning that it can be taxed; however, this would still mean that there is little control over it.
Many countries have claimed that cryptocurrency is not a safe means of making transactions. There have been claims made about the use of cryptocurrency in a few fraudulent cases.
The truth about this is that there is a certain level of anonymity when it comes to cryptocurrency; however, there is still a paper trail. This means that users linked to a specific account can be found.
For banks, cryptocurrency would mean the end of them as they would no longer need to use banks to conduct transactions, keep money, keep records of transactions, and many more.
Another stumbling block to using cryptocurrency as a sustainable means of exchange globally in third-world countries. Unfortunately, technology is not easily accessible, and because cryptocurrency is a digital means of exchange, it would become problematic for many. Although the world may move in one direction, a few countries may be left behind.
Another important thing to remember is that many businesses rely on the money exchange rate, such as the Forex market. Forex relies heavily on the trading of currencies, and without it, those doing Forex may be left without money. It’s important to remember that Forex is also decentralized however it would still get affected.
Cryptocurrency would be amazing to help combat the issue of exchange rates, transaction times, and many other things. However, a few countries would still need to catch up. Another side effect to expect is banks’ end, which could spell disaster for many.