Bitcoin, Ethereum, Ripple, Litecoin, NEO, Altcoin: these are examples of the word that is on everyone’s lips in recent times, and that word is cryptocurrency. It seems to be a mystery, both to individuals and to businesses.
Many people do not know what cryptocurrency is, how to use it, or where it came from. Because of this, some business owners choose to ignore it, relying instead on the currencies that they are most familiar with.
But just because something is familiar does not meant that it is the best option. Cryptocurrency is something that you should become acquainted with, because it may mean a lot for your business.
But – it is a complicated process. So if you want a tutorial on buying cryptocurrency in Australia, say, click the link to find out more.
The History of Cryptocurrency
Cryptocurrency was conceived of earlier than you may think. The concept was first idealized in 1982 by computer scientist David Chaum. In 2008, the maker of Bitcoin, Satoshi Nakamoto, announced that he wanted his new cryptocurrency, Bitcoin, to be available to the general public. He described Bitcoin as an electronic cash system that would allow peers to communicate and exchange money with others. The lynchpin to his system? Nakamoto decentralized the money involved completely. Businesses and banks had attempted this since 1990, but none had been successful up until that point.
The problem with digital currency is that nothing physical changes hands. It all operates on a payment network. Multiple accounts, transactions, and balances comprise a payment network. While this may sound simple, in practice it becomes much more difficult. The biggest issue with the currency was the prevalence of something called double spending. Double spending is when a client sends digital cash to two others at one time. Nakamoto, to fix the issue, ensured that decentralized servers handle all data. This made sure that no one server processed all of the data.
The Ins and Outs of Cryptocurrency
But two questions still remain: how cryptocurrency works and how it can benefit your company. For now, it’s time to address the former. Cryptocurrencies were first designed to function on platforms known as blockchains. A blockchain is a cryptographic technology. Blockchains are essentially mathematical equations, running on a technology called a hash.
Once a computer solves an equation, the block is finished, and another is piled on top. The second block takes the data out of the preceding block. When the next block is on top, the two are chained together. This is where the name of blockchain comes from. Now, if some data is broken inside of a block, then the entire chain from there on is compromised. To fix the block, the original, correct data must be re-entered. Once someone establishes a blockchain, they can continue building upon it. Blockchains are typically measured by elevation. When a blockchain is higher, it is more secure.
The final technical aspect of cryptocurrency is called mining. Mining is a process in which computers try to solve mathematical equations in order to get some currency in return. Then they compile the orders and place them in a sort of puzzle. Only powerful, specialized computers can complete this process.
The Benefits of Cryptocurrency
Now, the part that you have been waiting for. In cryptocurrency, there exists something called an ICO, or initial coin offering. An ICO is much like the traditional public offering. An ICO is a great way for a crypto-company to get off of the landing pad by attracting investors. These investors are looking for the next big cryptocurrency. These new companies sell their currency which is typically exchanged into one of the more popular currencies at the time, such as Bitcoin. There are multiple examples of this happening. Bancor was funded at a whopping $153 million.
And Now, A Word of Warning
In the world of technology, everything moves at a breakneck pace. You should keep current on the latest trends that are happening in the cryptocurrency world. Otherwise, something may happen that topples your tower. Stay vigilant and keep mining.