Cryptocurrency: Fintech Disruptor

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Blockchain, Sidechain, Mining – In the secret world of cryptocurrency, terms start accumulating minute by minute. While it may seem unreasonable to introduce new financial terms in the complex world of money, cryptocurrencies provide a much-needed solution to one of the biggest annoyances in today’s money market – the security of transactions in a digital world. Cryptocurrency is a defined and disruptive innovation in the fast-moving world of fin-tech, a relevant response to the need for a secure means of exchange on the day of virtual transactions. At a time when deals are just numbers and numbers, cryptocurrency offers to do just that!

In its earliest form, cryptocurrency is a proof-of-concept for alternative virtual currencies that promises secure, anonymous transactions through peer-to-peer online counterfeit networking. Wrong name is more of a property than real currency. In contrast to everyday money, cryptocurrency models operate without central authority, as a decentralized digital process. Within a distributed cryptocurrency mechanism, money is issued, managed, and approved by the collective community peer network – known as continuous activity. Mining Successful miners on peer machines also get coins to use their time and resources. Once used, transaction information is transmitted to the network’s blockchain under a public-key, which prevents the same user from spending twice each currency. The blockchain can be thought of as a cashier’s register. The coin is protected on the back of a password-protected digital wallet representing the user.

The supply of coins in the digital currency world is pre-determined, free of fraud by any individual, entity, government agency and financial institution. The cryptocurrency system is known for its speed, as transactions through digital wallets can generate funds in a matter of minutes compared to traditional banking systems. It is also largely unchanged by design, reinforcing the idea of ‚Äč‚Äčanonymity and eliminating the possibility of getting money back to its original owner. Unfortunately, the main features – speed, security, and anonymity – have also made crypto-coins a mode of transaction for numerous illegal trades.

Just like the real world money market, the currency rate fluctuates in the digital currency ecosystem. Due to the limited amount of money, the value of money increases as the demand for money increases. Bitcoin is by far the largest and most successful cryptocurrency, with a market cap of $ 15.3 billion, occupying 37.6% of the market and is currently priced at $ 8,997.31. Bitcoin hit the currency market in December, 2017, before crashing abruptly in 2018, trading at, 19,783.21 per coin. The fall is partly due to the rise of alternative digital coins such as Ethereum, NPCcoin, Ripple, EOS, Litecoin and MintChip.

Because of the hard-coded limits on their supply, cryptocurrencies are thought to follow the same principles of economics as gold – prices are determined by limited supply and fluctuations in demand. With the exchange rate constantly fluctuating, their stability is still seen. As a result, investing in virtual currencies is more predictable than a daily currency market at the moment.

In terms of the industrial revolution, this digital currency is an essential part of technological disruption. From the point of view of a casual observer, this growth can appear at once exciting, terrifying, and mysterious. While some economists are skeptical, others see it as an electric revolution in the financial industry. Conservatively, digital coins are set to replace about a quarter of the national currencies of developed countries by 2030. It has already created a new asset class in addition to the traditional global economy, and a new set of investments from cryptocurrencies will emerge in the coming years. Recently, Bitcoin may have taken a dip to spotlight other cryptocurrencies. But this does not indicate a crash of the cryptocurrency. While some financial advisers emphasize the role of government in cracking down on the secret world to control central governance mechanisms, others insist on continuing the current free-flow. The more popular cryptocurrencies are, the more scrutiny and control they attract – a common paradox that distorts digital notes and undermines the primary purpose of their existence. Either way, the lack of intermediaries and oversight is making it significantly more attractive to investors and making a huge difference in day-to-day trading. Even the International Monetary Fund (IMF) fears that cryptocurrency will displace the central bank and international banking in the near future. After 2030, regular trade will be dominated by crypto supply chains that will provide less friction and more economic value between technically skilled buyers and sellers.

If cryptocurrency aspires to become an essential part of the existing financial system, it will have to meet very different financial, regulatory and social criteria. It needs to be widely protected to provide hacker-proof, consumer-friendly and basic benefits to the mainstream financial system. It should not be a channel of money laundering, tax evasion and internet fraud but the identity of the user should be kept secret. Since these are essential for digital systems, it will take a few more years to understand whether cryptocurrency will be able to compete fully with real world currencies. While this may happen, the success (or lack thereof) of cryptocurrency in tackling the challenge will determine the fate of the monetary system in the days ahead.

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