When buzz about the ‘central government’ governing the whole nation is making rounds, when philosophers are thinking about breaking the frontiers of nations, when trade analysts predict about uniform pricing of commodities all across the globe, the crypto-currency seems to be an inevitable future. Cryptocurrency is a truly ‘global’ currency with complete decentralization. It is a digital currency depending on the various cryptographic algorithm which gives the power of anonymity to users.
Crypto-currency works on the public key and private key pair concept in cryptography. Every user of crypto-currency will have this pair and will publish the public key to the whole set of users. A single user broadcasts his message to all the users. The user of which private key is able to decode the message will be able to read the message and hence the identity of sender remains anonymous. Cryptocurrencies also use some cryptographic algorithms to encode the coins. The algorithm decides the number of coins that a currency can have.
The Cryptocurrencies which are dominating the market include Bitcoin, Etherium, Litecoin, Ripple etc. Bitcoin is the first crypto-currency which is founded by (rumor) Satoshi Nakamoto. It uses SHA 256 algorithm which is very secure for encryption of coins. It has limited the number of bitcoins to 21 Million. One can get the bitcoin through bitcoin mining, trading or as a reward for specific tasks.
The main distinguishing features of bitcoin from hard cash are as follows-
1)Decentralized Currency: A central bank of each country decides and regulates on the Currency of that country. It has the power to withdraw the currency at any point of time. So one has to trust central bank for all currency that one has. But there are no such regulations on the bitcoin, there is not any central agency that will determine the future of bitcoin. The users of bitcoin are going to decide the future of that.
2)Completely Anonymous: The public and private key algorithm make it impossible to find out the person who actually owns the currency. What we know is only the public key of a person. But we don’t know who that person actually is, which makes the owner an anonymous identity.
3)Lost Password!!!!!! : NO!!!!!!! This is the last thing you wish for as a user of bitcoin. If you lose private key or password of bitcoin wallet, you have actually lost your money!!!! There is no way to get the bitcoins back.
So amidst all the advantages and disadvantages, the incessant debates on the usefulness of bitcoins, the monetary value of bitcoin will decide its future. Whether the bit-coins will stay or go, completely depends on the volume of transactions occurring in it, the number of vendors willing to sell the things in return of bitcoin, the purchasing power of customers who are using the bitcoin.
Seeing the wave of bitcoin on which almost everyone is riding, it has the potential to be a ‘working currency’. So ride the wave or you will be compelled to have it because if not bitcoin, cryptocurrencies are here to stay.