Everyday we have different people ask what is cryptocurrency? Although we have some concerns with the concept and security of cryptocurrency, we felt like it was worth writing a blog to refer customers, prospects and partners alike too.
A cryptocurrency is a digital currency that operates in a decentralized manner and uses encryption. In other words, no central bank or government regulates this currency (it’s decentralized). It is digital in that it is virtual, not like physical money. And it uses security features encryption/cryptography in order to avoid counterfeiters, secure transactions, and generate the units of currency.
Digital currency has no physical form, but is an increasingly hot commodity such as Bitcoin, its most well-known iteration. Cryptocurrencies rely on blockchain technology. The blockchain is a public ledger of the currency’s transactions.
The idea of cryptocurrencies like bitcoin, litecoin, and many others, was to create a new currency for use by those without allegiances to anything but libertarian commerce. Many believe the cryptocurrencies utility lies in its potential to be a more efficient commodity than we already have. But in the modern world one of the primary functions of a state is to issue currency. So cryptocurrencies could also be thought of as a kind of declaration of statehood. And with that declaration comes responsibilities, if you want others to follow along.
Cryptocurrency, it’s popularity has been due to its ability to initiate secure and untraceable transactions. Now, that the technology is here, only time will tell if the rest of the world will accept it. We will have future posts with our opinion on cryptocurrency and why you would, or wouldn’t utilize it.
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