Technology of Cryptocurrency

A Cryptocurrency can be explained as a digital asset that have been designed in such a way that it can be used for the purpose of exchange as a digital format of money or currency. The Cryptocurrency uses the technique of the cryptography for the purpose of securing the assets, transactions and other details of the customer. In the past years it have been seen that the use of the Cryptocurrency like the Bit coin have increased a lot and people are preferring these over bank money as there is more profit to invest in the Cryptocurrency. Although many of the countries in the world does not prefer digital assets like the Cryptocurrency to be legal, but in some of the countries like the America the demand of these have been increasing since the last few years (Narayanan et al., 2016). Due to the ongoing demand of the cryptocurrency it can be often seen that big business mans are trusting to invest in cryptocurrency other than the American Dollar. This paper focus on the technology of the cryptocurrency, benefits, faults and how it is changing the American dollar market.

The technology of the cryptocurrency are very much simple to understand, it uses the concept of the cryptography for the purpose of securing the data of the customer. Other than this cryptocurrency use the technology of the blockchain and time stamping. The concept of cryptography uses the technique of encryption for security purpose. All the transactions and every process that is done in the world of the cryptocurrency is encrypted and hence one of the most secured way. Other than this, the technology of the blockchain can be explained as a shred ledger way of transaction (Hayes, 2017). Blockchain is a continuous block or record that uses the technique of the cryptography. Each of the block in the blockchain contains a hash pointer and a time stamp that is whenever ever the transaction is done the value of the hash and the timestamp is recorded. Thus whenever any further transaction is done, tit cannot be done without tampering these values. To be more specific let us suppose there are 3 users of the technology. When client 1 and client 2 does a transaction the record is saved, again when 2 and 3 does any transaction it cannot be done without informing client 1. That no transaction can be done without informing the previous owner of the fund. Also some of the major features of the cryptocurrency are is that there is no need of a central authority to monitor the transactions (Scott, 2016). The ownership of the cryptocurrency is solely depended on the value of the cryptography. When a new cryptocurrency is created it is known as the origin and the owner comes to know all the further transactions of the same. One of the major advantage and feature of the cryptocurrency is anonymity of the currency.  That’s is it can be called as pseudonymous, as the wallets of the cryptocurrency are tied to hash addresses and not persons. Hence it becomes tough for anyone to know the actual owner, as it is not traceable and only the transactions are publicly available.

Legal Issues with Cryptocurrency

Cryptocurrency is not a legal status in all the countries of the world. Some of the countries are still barring it from use siting different issues. While the USA permits the use of the cryptocurrency, it has been facing some of the major issues with dollar. It has been seen that many of the people are investing more in the cryptocurrency and the value of the dollar is decreasing. This is because of the factor that there is more profit and more return in saving money with cryptocurrency (Nguyen, 2016, November).  The USA government also stated that the cryptocurrency like the bit coin can be used for the purpose of buying and selling of items although there would be churched for tax for the transactions done. Other than this many of the countries like the Russia describes that owning of cryptocurrency is legal in the country but the use of the same for the purpose of transactions are not accepted. While some of the countries like the china totally bans the owning of the cryptocurrency.

These issue of the legalization has come up due to the decentralised nature of the cryptocurrency. That is it becomes tough for the legal agencies to trace the transactions done in cryptocurrency and hence the legalisation issue is rising for the countries. Also if there is any fraud or theft in the cryptocurrency then there is very less or no scope for turning the back the money used (DeVries, 2016). The dark market net is also one of the major reason for the organisation to regulate it.

This is one of the greatest controversies that the world are facing in the modern times. With the rise of the cryptocurrency is the recent future, many of the investment bankers are looking for the potentials on how the cryptocurrency like the bit coin, ethirum can replace the traditional flat currencies (Narayanan, et al., 2016). While the countries like the Cuba have already been started believing in the potential of the cryptocurrency other than the currency that are normally used (Inan, 2018).  With many of the researches of the fiancé industry of the United States of America stated that the term replacing of dollar over the cryptocurrency would not happen, but there are chances that most of the transactions of high values can take place using the cryptocurrency and this will reduce the use of dollar.

There are many advantages of using the cryptocurrency in the daily life, some of the main points of the advantages are:

• Easy Access: cryptocurrency are nowadays easily accessible from any country of the world and hence are easy to buy (Chohan, 2017). Cryptocurrency wallets are also very much accessible and any one can register for the same and hence buy some of the cryptocurrency available in the market. Due to the desterilized nature of the same it becomes easier to access the wallets without any trace by agencies.
• Quick and easy payment options: Using the wallets one can easily buy the cryptocurrency like the bit coin with easy exchange of regular money (D’Alfonso, Langer & Vandelis, 2016). That is one can just pay the money in exchange of cryptocurrency like any other transaction though secured gateways sitting in one place and observing all the components of the transactions.
• Lower Fees: The wallets that are used for storing the crypt currencies are very low costly and sometimes free available hence making the transaction cost of same lower or negligible.
• Private: These wallets are private and only one person use it at a time. Thus making it one of the most secured way for doing any traction (Hileman & Rauchs, 2017). Also the wallets just have only address of the user and not the identity of the user making them anonymous for use. Staying anonymous is also one of the major advantage of this system.
• Highly secured: With the use of the cryptography and blockchain these wallets are some of the most secured way of transition that one can have (McIlhenny, 2016). The user not only have the option to priority of the buying transaction but at the time of the third party selling comes to know where the money is going.

While there are some of the major advantages in the use of the cryptocurrency but also there are some of the major disadvantages of using the same.

• Difficult to understand: Although the concept is very well known to the people of the western world many of the people still does not understand the basic meaning of the same.
• Lack of knowledge: Due to the lack of the proper knowledge of the cryptocurrency it becomes difficult to understand by many of the people.
• Not widely accepted: Although the concept off the cryptocurrency is not very much accepted widely (Choo, 2015). One of the other reason for not accepting is due to the legal issues of the cryptocurrency. As many of the countries does not accept it, it becomes tough to sell it anywhere.
• Uncertainly: Even though cryptocurrencyis one of the most hot topic in the recent world but there is no certainty that whether this will sustain in the recent future of the same.
• Hackers: The wallets are although most secured way for the transation of the cryptocurrency there always remains chances on the security issues of the same.

Conclusion

Thus, concluding the topic it can be said that the cryptocurrency is one of the most promising technology that the world is having today. Its potential of dissolving flat cash like the Dollar is still a question to the world, but can never be said. IT may happen that at certain time it exceeds the dollar, or vice versa may also happen and the value of the cryptocurrency gets down to zero. It is a question of uncertainty on whether there the cryptocurrency will rise or dissolve in the recent future.

References

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Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and cryptocurrency technologies: a comprehensive introduction. Princeton University Press.

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