Cryptocurrency:
Cryptocurrency is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. The lack of a central issuing or regulating authority in cryptocurrencies is substituted by a decentralized system that records transactions and issues new units. Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It's a peer-to-peer system that can enable anyone anywhere to send and receive payments. Cryptocurrency payments exist only as digital entries to an online database describing specific transactions.
Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers.
Cryptocurrencies operate on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders. Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins.
There are thousands of cryptocurrencies. Some of the best known include:
Bitcoin; founded in 2009, was the first cryptocurrency and is still the most commonly traded. The currency was developed by Satoshi Nakamoto.
Ethereum; developed in 2015 is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum. It is the most popular cryptocurrency after Bitcoin
Litecoin; This is the currency most similar to bitcoin but has progressed faster in the development of new innovations, such as faster payments and processes that allow more transactions.
Cryptocurrency removes single points of failure, it is easy to transfer funds between parties, no third party is involved and most importantly remittances are streamlined. Besides these pros we must be aware of its risk factors such as transactions are pseudonymous, pseudonymity allows for criminal uses, expensive to participate in a network and earn and lastly there are off-chain security issues.
This cryptocurrency offers immense disruption potential and opportunities in the future towards innovation within the financial sector.
