Cryptos changed the way the world operates. From the trading market to ordinary transactions and very soon, a completely different way of the payment system. How did it come to this, and where did it all start? We will talk about everything crypto and why it became so crucial for the economy and people.
What is crypto?
A cryptocurrency is another form of paying currency, but the main difference is that it is entirely digital; thus it does not exist in physical form. It’s vital to mention Bitcoin (as the first crypto ever to exist), came to life, not because of trading. We want to explain how crypto is made and all types of encryption that are possible. Since, for example, Bitcoin is crypto, it means it exists thanks to various kinds of encryption and algorithms that are continually changing. Changing algorithms is especially important, so Bitcoin can ensure it’s privacy and safety. There are software and programmes involved as well since its production depends on it. To produce a crypto, especially Bitcoin, isn’t an easy job. It requires supercomputers and lots of electricity. Several operative systems are also a must including cryptography that is hard to penetrate through. That’s one among the reasons why it’s so hard to make or mine cryptos. The algorithm is ever-changing since the main focus is on security. There are multiple encryption names such as hashing, public-private key pairs, elliptical curve, etc.
One of the reasons Bitcoin made a complete turnover of the system? It is decentralized, meaning no authority can control transactions. All records of digital finances don’t exist (almost). That is why security is top priority and blockchain is there to ensure your data stays that way.
How did it start?
Bitcoin is slowly entering its twelfth year of existing. What’s exciting and mysterious about it is that we still don’t know who made it. What is “known” is the Satoshi Nakamoto organization (or maybe an individual, we yet don’t know that), decided to appear one day with Bitcoin online. Imagine for 12 years. Bitcoin has been number one blockchain-based cryptocurrency on the market, even though altcoins appeared (other cryptocurrencies). Everyone is expecting to see what will happen when Bitcoin hits its 21 million cap. What’s unusual about Bitcoin is that when it hits this number, or the number of coins has been mined, Bitcoin will stop its production altogether. Mining is becoming harder and harder since algorithms are changing faster, and miners have to crack the much more complicated code than it used to be. That’s why it takes for one Bitcoin to be mined around 15 minutes, with a team of miners. The cap isn’t expected to be reached in another two or three years.
Another impact on the economy has been thanks to a new buying and paying method that is completely digital. As we briefly mentioned, it’s virtually impossible to track Bitcoin, which caused many theories and situations that were good but also bad (as with any currency). The fact remains USD is the most liquid currency on the market, but Bitcoin has a huge influence on the trading market itself. People are almost always choosing to invest in Bitcoin, especially around this time when Bitcoin hit it’s an all-time high, and it’s expected to go around 100.000 per Bitcoin in a year and a half, experts predict. With Paypal accepting Bitcoin as a regular currency, they opened a more than probable possibility of cryptos becoming a traditional payment method in the next year, even outside the market. Ethereum is the second most significant cryptocurrency with a different goal from Bitcoin, and it has only a yearly cap. It’s convenient if you like how it operates (produces more coins than Bitcoin), and it’s been behind Bitcoin for years now.
How did cryptos shake up the system?
In a way, Bitcoin is a rebellion of many. People worldwide got the chance to enter the market even if they are not wealthy, and transactions are much faster. You cannot control them, and cryptos are influenced by inflation. Still, they are more transparent than many other regular currencies. Another advantage of cryptocurrencies is that thanks to Forex, you can trade 24/8 and the trading market is approachable more than ever, thanks to the internet. Finally, trading is not a thing for the privileged.