Todd Sumamno
Cryptocurrencies are a form of digital currency that first appeared after the 2008 financial crisis. The first cryptocurrency ever launched was Bitcoin, with its own blockchain technology.
Bitcoin was not only a digital currency but, in a way technological idea that was supposed to serve as an alternative to ordinary fiat currency and be the solution to the modern financial problems of the 21st century.
The main idea behind Bitcoin and Cryptocurrencies, in general, was to safely bring the currency system into the virtual world in order to expand commerce as well as to serve as an alternative to traditional fiat currencies.
Cryptocurrencies Usability
Ever since the introduction of Bitcoin by the mysterious person Satoshi Nakamoto, there has been a great boom in the crypto world, where various cryptocurrencies were launched for different intentions. We can classify cryptocurrencies more or less into five spheres based on their function.
The main function cryptocurrencies hold is transactions, where currencies like Bitcoin and Monero are used as payment methods and are exclusively used for trade.
Utility is another function. Cryptocurrencies like Ethereum are considered utility currencies, which means other currencies can be based on their Blockchain, and they themselves have specific duties on that Blockchain. An example of governance cryptocurrency is Aeve and CultDAO.
The governance cryptocurrency allows its user to secure certain rights, such as voting on the Blockchain.
In addition, Security tokens allow the user can gain ownership rights over things like stocks. There are cryptocurrencies without any purpose that market themselves as memes or jokes, but they also might not be legitimate currencies that aim to defraud the investor.
Many cryptocurrencies nowadays are widely adopted to many commercial online platforms such as car dealerships, clothing stores, betting, and online sites.
Nevertheless, there are sites that still have not included crypto as a payment method, for example, sports betting with Novibet is one of the most advanced betting sites with many different traditional payment methods.
The Technology behind Crypto Currencies
Essentially cryptocurrencies are codes since they are subject to the Blockchain. The Blockchain is an online ledger that takes into account every transaction of a particular cryptocurrency then the validators on the network verify those transactions. Blockchain is recognized as an interesting and unique tech, and there are many organizations that aim to use it for other industries.
However, unlike fiat currencies, cryptocurrencies are, as the name suggests, protected by cryptography, which means the identity of the person using them will be hidden. The key idea behind most cryptocurrencies is that they will protect the identity of the individual. Cryptocurrencies can be minted in a process called mining or purchased in centralized, decentralized exchanges or peer-to-peer transactions.
Cryptocurrencies Today
Nowadays, cryptocurrencies are in a period of financial stagnation. The majority of them follow the price action of Bitcoin, which portrays the whole of the crypto market and its future as dependent on Bitcoin. There are still crypto skeptics who doubt the ambition of cryptocurrencies. They compare Bitcoin to similar historical cases in the past that turned out to be economic bubbles, for example, the South Sea Bubble of 1720, and criticize the current function of Bitcoin.
Brittany
