Cryptocurrency-
a word that has taken both the real and virtual world by storm in recent years and not always for the right reasons. But what exactly does it mean and why it is among the most hotly debated topics across the world today.
Well, as amply evident from the word itself it’s got something to do with both cryptography and currency.What is Cryptocurrency?
When put together, it can be defined as an alternate form of digital currency used for payment which is much cheaper and cost effective too.It’s a kind of virtual money which does away with the need for cash, cheques or even a credit card to make a payment which can be made directly sans the need for an intermediary like a bank.
It utilizes cryptography (the process of encrypting essential data and vice-versa) to verify and secure transactions and control the creation of new units of particular digital currencies.
In simple terms, cryptocurrencies are akin to limited entries in a central database that cannot be tampered with or changed without triggering strict security protocols.
History of Cryptocurrencies
Well to be perfectly honest, cryptocurrencies are not a new phenomenon. In fact, there were several attempts at creating a usable digital currency way back in the 90s during the tech boom.Some of the most notable examples that came to being were Digicash, Beenz and Flooz.
But none of them survived for long – for a variety of reasons. Fraud, financial problems and internal issues among the companies that launched them were among the primary reasons for their abject failure.
Interestingly all of them used a third-party facilitator to verify such transactions. With the collapse of such companies, it was thought to be the end of the road for virtual money as well.
Until the introduction of Bitcoins in early 2009 – a new generation of digital currency – by a largely anonymous group of programmers under the alias of Satoshi Nakamoto.
Described as a peer-to-peer electronic cash system, Bitcoins were totally decentralized – which meant there was no central authority or servers involved. This was also the most critical factor responsible for their survival and success.