All over the news as of recent is use of the terms blockchain, cryptocurrency, bitcoin, and more, but at the end of the day, what is it?
Some have stated that cryptocurrency is “criminal money,” and that they “want nothing to do with it.” It still stands however, that the market of cryptocurrency is one that is booming, and does not appear to be slowing down any time soon.
Many people have categorized cryptocurrencies as a fad, or a bubble and more, but regardless it is a revolutionary financial system that has many benefits to it in our current financial world.
One of the main issues with the currency is dealing with the idea of a digital currency even having value. Just like any other currency, cryptocurrency holds the concepts of scarcity, fungibility, divisibility and transferability close to its heart. At the end of the day, it shares most of the characteristics with the fiat currencies that we are used to, but instead of being backed by “gold” or some other valuable asset, cryptocurrencies are backed by the network and the individual that they stand on.
Since the technology behind cryptocurrencies is based on a network of all the computers using it, one economist stated in an analogy that “you can’t just break into one house — you have to break into an entire down,” to hack blockchain technology. This ensures the safety of the currency and its value.
Many of those who doubt the currency and its value have had similar reasonings to those who doubted the internet revolution. One economist in the industry stated that “the same way people in the early days of the internet thought consumers will never use this, there will never be commerce on this platform, it’s too complicated for normal end users — boy, were those people wrong.”
The traction that cryptocurrency has gained shows that there does not appear to be any slowing down in sight.