Crypto Currency: A bright future or just a fad?
Block chain and crypto currency have been making the rounds of internet lately. The finance world is abuzz with these; lets delve into the practicality and feasibility of crypto currency. Are they even worth the attention they are getting?
Blockchain is a decentralized form of electronic ledger that offers full transparency and security. Crypto currency is a form of electronic currency used in implementation of blockchain technology. Bitcoin, one of the most popular form of cryptocurrencies, rose from an academic concept in 2009. Since then it has taken astronomical leaps causing a sort of revolution in electronic transaction systems.
Crypto currency is the future and no we aren’t being way too optimistic when we say this. In 2013, crypto currency peaked to 2 billion market value- a 10 fold leap from its initial value.
Some of the factors that mark the rising importance of crypto currency in the near future are:
1. Governments can’t devalue this currency: Crypto currencies are completely out of the control of governments. They can’t regulate crypto currency’s flow, value or usage. This makes crypto currency one of the most reliable form of electronic currencies. We can now relax that the unsettling incidents like that of Cyprus's Central Bank (March 2013 ) can no longer scare us. The Central Bank back then took back uninsured deposits of more than $100,000 in order to recapitalize itself. This roll back caused a huge commotion and unrest in public. Thankfully, since crypto currency isn’t owned by one person/ company or government it cannot be devalued through such dictatorship.
2. Security: Crypto currencies are secure. With crypto currency neither identity theft nor any other such fraud is possible. Unlike credit cards that rely on pull mechanism wherein you feed all your credit card info to the payment merchant, crypto currencies rely on push mechanism. This means that you feed in the exact amount you want to send the recipient or merchant without sharing your sensitive info like the credit card detail. Furthermore, since crypto currency is a digital currency it cannot be reversed by the sender or even counterfeited. While with credit cards, such transaction charge backs are possible. Being decentralized and transparent, crypto currency is reliable and secure.
3. The most important factor about crypto currency- Not any company but you own it: Take any form of online transaction platform like PayPal or Payoneer. These companies own your account and your money up to a large extent. For example, if due to any reason these companies decide that your account has been misused or its security compromised then they can easily freeze your account. And unfortunately you will be locked out from accessing your own funds and assets. This has happened to many people and believe me it is the most frustrating thing. You have to go through extreme majors and there are still chances you might not get your assets back. Luckily, crypto currency has emerged as the right answer at the right time. Crypto currencies aren’t owned by any company and you are the owner of your own assets under this system. There is a private key and a corresponding public key that together become your cryptocurrency address. This means you own this and nobody can take this away from you without your consent. Finally, a system you can trust.
Crypto currency is still in its nascent stage but remember there was a time when even internet was new. It scared people and made them doubt it’s reliability. But now it has transformed the world so much that we can’t even imagine a world without internet. Crypto currency is set to transform the techno- financial world and the way we view it. It’s just that it will take a while to grow fully and replace credit cards globally. But believe me, it will do so definitely one day!