Cryptocurrency and Blockchain Technology

This article on Cryptocurrency and Blockchain Technology…

Introduction-

Cryptocurrency is a digital or virtual currency created and stored using Blockchain Technology. Cryptocurrency is basically digital money that allows making peer-to-peer transactions using digital cryptographic wallets. Cryptocurrency is made up of two different words ‘Crypto’ means (Secure) and  ‘Currency’ means (medium of purchase of goods and services). It uses decentralized technology which makes secure the payments. It runs on a public ledger called “Blockchain”. People or the team who takes the whole responsibility and maintain the technology are called ‘Miners’ and the process is called ‘Mining’.

Blockchain Technology-

Blockchain technology is a decentralized database that maintains a continuously growing list of records and transactions.

A blockchain is a group of Blocks that are chained together. Each Blocks store three types of information :

• Transaction information: It contains peer-to-peer transaction details.
• Hash: The unique address of the transaction
• Previous Hash: It has the Hash same as the previous one.

Due to this technology, it is easy to track the transaction information and secure it. If we try to change the data of any Block suddenly Hash will be changed, it means in the next Blocks wrong Hash shows. That’s why if we try to change the data of any Block the data of all the next blocks will be invalid. It means that it is impossible to change the data of any Block. Now a day’s Blockchain Technology is used in so many Domains, Cryptocurrency is one of them. Now we can transact or transfer cryptocurrency peer-to-peer with the security of this technology.

Uses of Blockchain Technology-

• In Businesses- To secure the data of business and easy to track the history.
• In Hospitals- To store the patient’s records and all about the hospital’s security.
• In Cryptocurrencies, there is end-to-end/peer-to-peer encryption i.e. it is impossible to trace the information by a third party.
• Other Uses- It is also used for many purposes like in data collections of large corporate projects, Start- up’s, etc.

How to obtain Cryptocurrency-

 There are many ways to get cryptocurrency  like Mining, Brokerage, crypto exchange, etc. in which a few are listed below :

• Through the mining of blockchains using powerful computers- Digital mining is same as physical mining but here you have to do some work like solving some problems, taking responsibilities, and maintain the technology and get some reward in the form of crypto.
• By selling goods and services to an owner of the cryptocurrency- We can sell our goods and services to the miner of cryptocurrency and purchase from them to get cryptocurrency.
•  We can also exchange legal tender to buy cryptocurrency- Any person of the world can exchange their national currency with the cryptocurrency.

Advantages of Cryptocurrency-

1. In transactions: In physical transactions there are too many hurdles like paperwork, huge brokerage, time-consuming, and too expensive to-store record history. One of the advantages of cryptocurrency transactions is that it is an end-to-end/peer-to-peer secure process. It can store transaction history records at low expenses.

2. More Confidential Transactions: Another best advantage is that each transaction is made between the two-person is unique. The transaction is received by a person is the same as the transaction made by another person, no margin occurs.

3. No transaction fees: As we know that the transaction fee charged by any of the bank account or any credit card account is very high, especially when we make a lot of transaction. In this case, cryptocurrency is a better option for fewer charges as compared to Banks.

4. Greater Access to Credit: Day to Day the world is becoming more digitally and about 2.2 billion individual users have active internet access. But most of them are even don’t know about the internet banking system. Cryptocurrency system holds the potential for greater tomorrow.

5. Easier International Trade: The international exchanges between two countries will be easier through cryptocurrency mechanism and the charges during the exchange will be reduced and less time-consuming.

6. Individual Ownership: In the banking system,  they charge the amount for any reason and they have the right to close your account anytime. In this case, you are the owner of your own account and you can manage by yourself.

7. Adaptability: There are currently 1200+ cryptocurrencies are in circulation worldwide, but few of them are able to unique identity in the blockchain. Example = Bitcoin (most popular cryptocurrency followed by Ethereum and Dogecoin.

8. Strong Security: Once the transfer has been authorized, it can’t be reversed. This is a challenge against fraud. The strong encryption technique is employed through the Blockchain and cryptocurrency transaction process.

Disadvantages of Cryptocurrency-

1. Illegal Transactions: The security of cryptocurrency transactions is very high, it’s near to impossible to track the user by their wallet address. The most famous cryptocurrency Bitcoin has been used for exchanging money across the world for illegal purposes like Terror finance, Drug Trafficking, Narcotics, Illegal trade, etc.

2. Data loss: Due to the strong security of cryptocurrency it is safe to credit your money in cryptocurrency but due to some technical issue like losing a private key to their wallet, you have to lose your amount of data then it’s impossible to get it back.

3. Operated by some Organizations: Cryptocurrencies are known for decentralized technology but some organizations have control over this, they will change the rate of the cryptocurrencies.

4. Loss of Energy: In mining and storing cryptocurrency heavy thermal electricity consumption harms the environment. It will result in E-waste generation, will increase the amount of carbon dioxide in the atmosphere.

5. Graphic Cards Demand and Price Hike: Due to the huge demand for graphic cards by bitcoin mania there will be a shortage of graphic cards for common users. This will result in a surge in the prices of graphic cards and other computer systems.

6. Government will be Deprived of Tax collection- For normal transactions government earned some amount by imposing a taxation system in the society but in the transaction of cryptocurrency there will be no earning of taxes in the government treasury. This will create a challenge for the welfare of the poor and marginalized section.

7. Ponzi Investment Frauds- There may be a chance of certain money investments in fraud schemes. People in the hope of getting more and more money may ruin their earnings in Ponzi investments.

8. Decrease in value of Cryptocurrency in Near Future- As there are a total of 21 million bitcoins that are under mining process by various entities so it may be possible to decline in the value of cryptocurrency if more and more miners will enter into this field. Further, if quantum computers will be invented, then they will solve blockchains in seconds and will erode the value of cryptocurrency.

Legal Status By Some Countries-                                                          

El-Salvador became the first country to officially announce the legal currency of the nation. Salvadoran president “Nayib Bukele” had proposed to recognize Bitcoin as their official currency on 9th June 2021.

Cryptocurrency is achieving popularity in the present world due to its growing demand but there must be some strict rules and acts to prevent any kind of misuse and harm to the people.

Thank you guys for reading this article on Cryptocurrency and Blockchain Technology. I hope you liked it please share it with your friends and let me know your feedback in the comment section.

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