Cryptocurrency, you must have heard of it but there are still only a few people who completely understand the crypto-market.
Although the rabbit hole is quite deep down, we can try to put some light on the basic understanding and role that crypto currencies are playing in today’s economic markets.
As known by many, Bitcoin is one of the most demanded crypto currencies followed by other crypto currencies such as litecoin, ripple or ethereum based on the same idea of decentralized currency market. Put in simple words, cryptocurrency is about having an encrypted currency which is not centrally governed by a central bank or any other financial institution. In essence, the whole Bitcoin system is not owned by anyone!
Then how does it work?
The crypto-market works with the help of miners and stable block chains. Miners are independent people who validate new transactions in a block chain. You see, in a traditional currency system the central bank would validate any new transactions made by its consumers but as there is no central body in a crypto-market, it is validated by miners. Miners do this by solving encrypted blocks that contain the transactions and upload it to the block chain. In return for their work, miners get paid with cryptocurrency themselves.
Now, interesting use of cryptocurrency is funding new business ventures by the issue of Initial Coin Offering (ICO) or Security Token Offering (STO). In a broad sense, ICO and STO are quite similar to a difference of one of them (STO) being regulated by the securities law regulated by the respective regulatory bodies. The purchase of an ICO or STO gives ownership to a digital asset or in some cases physical assets of the issuing business entity.
So, how can you benefit from these digital currencies?
- Crypto currencies operate on a decentralized network, meaning that they are not controlled by a central authority like a bank or government. This provides businesses with greater autonomy and control over their financial transactions, without the need for intermediaries.
- Some websites offer crypto mixing for protection from malwares and hackers.
- Traditional payment methods, such as credit card transactions, can involve high fees for both the merchant and customer. Crypto currency transactions typically have much lower fees, as they do not require intermediaries to process the transaction.
- Traditional banking systems can take days to process transactions, especially for international payments. Crypto currency transactions, on the other hand, can be completed within minutes or even seconds.
- Crypto currencies can be used for transactions across borders without the need for currency exchange, making it easier for you to expand your business globally.
- Crypto currencies are based on block chain technology, which provides a high level of security and prevents fraud. Transactions are recorded on a public ledger, making it difficult for malicious actors to alter or falsify records.
- Businesses can invest in crypto currencies as a form of asset diversification, as well as a potential hedge against inflation and economic instability.
- Accepting crypto currency as a form of payment can attract customers who prefer using digital currencies or value their privacy.
While trading, the most important thing to remember is to use a website with crypto mixing to carry out transactions safely.