There are a lot of people who do not have a clue what crypto currencies represent.
It comes across as a geeky kind of topic that is best left to computer wizards. Crypto currency stands as a global phenomenon that has refused to go away. Even though the common person may not be aware of its significance, most governments and banks are aware of its importance. This article is an introduction that sheds light on what it is and how it can be traded.
The broadest definition of a crypto currency is that it represents any form of virtual currency that employs cryptography as the main security feature. This security feature that makes it difficult to counterfeit, makes it stand out from other conventional currencies. Another feature that defines it is that it is decentralized. It is not issued by one central authority. It is not under the regulation of banks and other financial institutions.
Crypto currencies were designed as a cash system that is entirely digital in nature, and intended to work across peer-to-peer networks. It requires a consensus that is absolute across such networks. It involves validating requests of transfers between two persons on the peer networks. Once the transaction is confirmed and validated, the new data is combined with other data and reflects as a ledger entry. This is commonly referred to as mining in which the crypto currency coins are made.
One of the negative connotations that are attendant with crypto currencies is that they are mostly used for illegal and black market activities. These may include money laundering, paying for arms, child pornography and the most common being tax evasion. They also have the disadvantage of having no central repository and can be totally lost in case the data stored is lost. The rates that are influenced by demand and supply are also quite large when compared with conventional bank rates. The most commonly used of crypto currencies include Bitcoin, PP Coin, Litecoin and Namecoin.
Fortunately, the answer to this question is that there are positive uses of using crypto currency. The first positive aspect of using crypto currency is that it significantly reduces the transaction fees between two parties. It is also irreversible and this ensures that the transaction is finalized without interference from third parties such as banks. Crypto currencies allow for anonymity and are a secure form of payment. If you want to make payments and maintain your privacy, crypto currency should be your ideal option.
You can borrow and lend against crypto currencies. There are platforms and exchanges where one can borrow and lend against crypto currencies. One of the most commonly traded forms of crypto currency is the bit coin. Other currencies that are also actively used are Monero, Augur and Ether. You may use your wallet, which has the crypto currency to borrow or lend using them as collateral. It is time you tried out this form of alternative cash.