Bitcoin is by far the largest and most popular form of cryptocurrency across the globe. With a market capitalization of $114,094,592,064 and a current price of $6,658.56 per coin, it beats its competitors Ethereum, XRP, and Litcoin by a long shot. Cryptocurrencies can be hard to understand and even to trust if you’re not deeply involved in the process of mining them or have a firm understanding of what they actually are. Many opportunistic people are investing in cryptocurrency hedge funds due to the success they saw come out of cryptocurrencies earlier in the year. There are actually over 800 different types of cryptocurrencies but the odds of many of them gaining the traction and value that some of the larger cryptos have is slim.
Cryptocurrencies have transactional properties as identified by Block Geeks, which is why they’re different from the traditional forms of monetary exchange. The properties include irreversible pseudonymous, fast and global, secure, and permissionless. The properties are described as follows:
- Irreversible- once a transaction is confirmed, there’s no going back. Not even the smartest miner in the game will be able to get your money back to you, so you better be sure you’re sending the money to someone you trust because it’s one of the most permanent decisions you can make.
- Pseudonymous- none of the accounts or the assets sent are in anyway connected to people’s names or identities. You can give or receive cryptocurrencies through what are called addresses, which are basically just a long string of random numbers.
- Fast and global- It doesn’t matter where you or the person you’re sending or receiving cryptocurrencies from is physically located. Sending assets across the globe is the same thing as sending them to someone in the next room. It happens just as quickly and just as easily.
- Secure- Cryptocurrencies are secured through cryptography. There are public and private keys that allow transactions to be made public, but unable to be changed by anyone.
- Permissionless- No one has control over your use of cryptocurrency. You don’t need permission from a bank or a third party company.
It also identifies the monetary properties of cryptocurrencies. For these reasons, paired with the transactional properties listed above, cryptocurrencies have the potential to take over the way we pay for products and services. The monetary properties include controlled supply and no debt but bearer. Below are quick explanations of the two.
- Controlled supply- just like cash, there is a limited supply of the different types of cryptocurrencies. Apparently, coins such as bitcoin have a decreasing supply that will eventually run out. The exact time the supply is going to run out can be calculated due to a code that’s programmed into the crypto schedule.
- No debt by bearer- there’s no such thing as debt in cryptocurrencies. Unlike a bank, the ledger represents the exact transaction. There’s no such thing as pending.
Cryptocurrencies are still in their beginning phase but are expected to play a large role in the future economy. With the shift in how we pay for things and our growing frustration with the middle man when it comes to our money, cryptos are bound to grow in popularity. Currently, people are optimistic about investing in funds that involve cryptos, but many are more intimidated by using cryptocurrencies themselves. The idea of investing or betting on the success of something that everyone says is the next big thing seems easier than trying to understand why this new type of payment is going to be the next big thing. The overwhelming majority of people know very little to nothing about cryptocurrencies, but that’s going to change in the coming years. Millennials are leading the pack of crypto advocates and investors. Once the new system gains the trust of the population, it could quite possibly become the new norm in the payment world.