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Cryptocurrency, a virtual but not so extravagant method of payment

Cryptocurrency is one form of digital currency that can be used to complete transactions like an asset purchase or transfer of money. This is the most modern form of legal tender that is decentralized and can be used as a medium of exchange. Since the working of cryptocurrency is a bit complicated, one has to have absolute knowledge about how it works. These cryptocurrencies, including bitcoins, are regarded as an asset in some countries and digital coins in some others, are simply virtual coins.

This form of electronic cash closely resembles a bank account wherein the transactor has a verified account for payment and maintains enough balance to complete a transaction. Even though it can be used comfortably as an alternative to paper currency, one has to wary of the complications that arise because of the absence of a central agency to control the working of cryptocurrencies. The only discredit to this digital money is that they lead to double spending because of the lack of a central agency to streamline the whole process.

Information, in this form of currency, is stored using blockchain technology. This so-called technology maintains the secrecy of the transactions and prevents third parties from accessing or altering the information. Furthermore, this system improves transparency of the transactions as it requires a large network of computers to validate them.

Cryptocurrencies became financially attractive to many investors because it is highly affordable and the most protected form of currency available in the coin market. These currencies are used as a medium of exchange of cash when dealing with real estate transactions in highly advanced nations like the US. There are many cryptocurrencies, apart from Bitcoin, that are reasonably priced and are worth the money you spend to own one.

This blockchain technology has particularly attracted banks like JP Morgan, who considers security as a major threat to the banking system. The secured ledger, used to save transactions, prevents some anonymous persons, other than the account holders, from gaining access to their transactions.  Another reason why many banks are attracted towards this type of digital currency is that the criminals can’t make this a hideout as each and every account holder has to reveal his identity or share every information. Hence, this e-money is increasingly preferred by a lot of banks and IT companies.

In short, cryptocurrencies are digital money that is secured by encrypted passwords used to make transactions in the coin market. If you dig a little deep into the working of a coin market, it closely resembles a stock market where transactions are made through a stock exchange. There are close to 1384 cryptocurrencies including BitCoin, the most preferred digital currency, in the coin market. You can choose the one that doesn’t slim your wallet after considering the pros and cons of these alternative coins available in the blockchain project. At present, Bitcoin has the largest market capitalization, but many newcomers, are yet waiting to enter this digital currency market.

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