It is more than a decade since bitcoin is invented, bitcoin is the first cryptocurrency which came into existence. After bitcoin, there are numerous cryptocurrencies which works on different networks such as ethereum, Neo, ripple, stellar and many more.
With launch of such cryptocurrencies, globalization has reached to next level. Earlier it was required to have account in global banks for making transaction but with use of cryptocurrencies you dont need to go anywhere. As you can make trasnaction from your mobile phone or computer by using simple applications.
Market Cap of different cryptocurrencies
According to a recent report published by CCAT, shows that people have started learning about cryptocurrencies. Around 3 million active people are mining cryptocurrencies and storing it. It already shows that the cryptocurrencies are now accepted by the people.
Another statistic revealed that a market cap of cryptocurrencies is hundreds of billions and there are thousands of people who have invested at least $100.
It is the recent statistics from coinmarketcap, which shows the best 10 cryptocurrencies in the market.
Different reasons for cryptocurrencies to gain so much of importance
Recent few years back, we have seen that their cryptocurrencies and blockchain technology have become buzzwords. And it is going to be the next big thing in the industrial revolution. There are several reasons why cryptocurrencies have gained so much importance.
One of the primary reasons is that it has opened new possibilities for making transactions. Such transactions are not controlled by anyone and it is completely private among the sender and receiver. Several more reasons are there, which we will discuss in this section.
Cryptocurrencies transactions are cheap and have fast remittance.
Different cryptocurrencies are maintained by the different peer to peer networks. For even transactions with barely less amount, fewer fees are charged.
Whereas transactions done in a traditional system with a third party would charge a huge amount of fees and take a huge amount of time for transferring the money.
All cryptocurrencies transactions are private.
With this, it means that whenever two different parties are making transactions between them, their identities are always anonymous.
In any cryptocurrency network, users’ names or any other information is not share with anyone in the network.
All users do have private addresses and public addresses for identity. And for any transaction, the receiver’s public key is used to make a transaction.
It is completely a decentralized network.
In any blockchain network, an underlying network on which cryptocurrencies operate does have multiple machines in which data is stored in chunks. All the data stored in a decentralized network is fully encrypted and shared.
It is much more secure than any other centralized network. Some of the decentralized storage is available for very little cost. Currently, storage, file coin, and siacoin are some famous decentralization storage networks.
With the rise of different blockchain networks and cryptocurrencies, different blockchain enthusiasts and developers have come up with decentralized applications.
Such applications use smart contracts, analogous to the traditional contracts. Such contracts are self-executable and not controlled by any entity.
Based on the conditions satisfied in decentralized applications and smart contracts, transactions take place.
With so many advantages, cryptocurrencies do hold importance in the current financial system. And it works behind a promising technology called blockchain technology. In the next section, we will discuss the big question, which is ” WHY CRYPTOCURRENCIES ARE NEXT BIG THING?”.
Are cryptocurrencies the next Big thing in Industry?
The answer to this question is yes! If we look in different scenarios followed in traditional banks, we do require cryptocurrencies and a decentralized financial system.
Different flaws in banks.
High transaction fees and huge turnaround time.
Different transactions in banks charge huge amounts of fees for transferring the funds. And if transactions involve different banks or areas it takes a huge amount of time. On average, if a transaction occurs from one bank to another bank, it does take 3-5 days for getting everything clear.
Your details are not private.
Different banks have different rules. Some of the rules do need you to provide all complete details and need to have a guarantee by someone in your known.
Funds are available in single location.
The bank stores everyone’s funds in a centralized location. Storing funds in decentralized locations do have lots of disadvantages. Some of the disadvantages are as follows.
Recently, several big industrialists have taken loans from banks and didn’t return the amount taken as loan. Such results a huge loss to banks and people who have accounts in banks because money given as loan belongs to the people.
If all the servers of the bank go down, it becomes very difficult to make transactions.
You need to fulfill the minimum requirements to make your account in a bank.
Different banks do have different rules, but one common rule in all the banks is that a person needs to have a minimum amount to create an account.
All flaws changes into advantages by different cryptocurrencies. If you are looking to use cryptocurrencies, you do need to fulfill any requirements. You can simply create your account in any exchange and do transactions. Although there are still some countries which try to regulate such exchanges and ask for identity proof.
All the transactions done using cryptocurrencies do not need any intermediary to control transactions, unlike banks. It charges very few transaction fees like earlier mentioned. A major advantage of cryptocurrencies is that you can make transactions from anywhere around the world. Such is not doable with using banks, because it involves lots of formalities and you need to have a bank account.
Cryptocurrencies vs Fiat Currencies.
Earlier we discussed the major advantages and disadvantages of the underlying network of cryptocurrencies. In this section, we will discuss how cryptocurrencies are different from fiat currencies and what are advantages.
Most of the countries do have their native currencies using which make transactions locally in the country anywhere. Different countries do have different native currencies, for example, USD for America, AUD for Australia, and many more.
Generally, the value of Fiat currency depends upon the gold reserve or any other valuable reserve. Based on the amount of reserve fiat currency can be printed. But now many countries have changed such systems.
Fiat currencies do inflate a lot, meaning that fiat currencies do change their value. In earlier days after independence in India, with 10 rs, citizens were able to buy much and it was the minimum amount to survive. But as years passed, the minimum amount to fulfill needs reached 1 lakh or 100k. It is all because of inflation which happened. Its value reduced.
Unlike Fiat currencies, it does not happen in the cryptocurrencies, since cryptocurrencies are available in fixed amounts that rotate among the people.
Let us take an example of bitcoin, currently, there are only 21 million bitcoins available in the market, it is the fixed amount. Likewise, different cryptocurrencies do have fixed supplies and their value depends on the supply and demand.
With so many advantages, cryptocurrencies look quite promising for being a medium of transaction. Currently, different countries have their regulations but still, it is going to be great if it works with the current financial system. If you want to learn more about different technologies do subscribe to our blog https://techiesphere.co