Although it is more and more talk about it, cryptocurrency remains a concept still unclear for many consumers. This encrypted and decentralized virtual currency takes a little more value each day and gives birth to a promising alternative economy. From Bitcoin (Bitcoin Lite Trezor Electrum), the first and best known cryptocurrency, to Ethereum, through the Ripple, Litecoin or Monero, digital currencies could well invade our virtual wallets in the coming years…
What is a cryptocurrency?
Cryptocurrency is a 100% virtual alternative currency; Unlike banknotes and coins, she has no physical form. Generated by open source software and netizens (called “minors”, we will return), this encrypted currency can be used only by the person holding the decryption code, which can be a password, a fingerprint, etc. Like any traditional currency, it can be used to make purchases, transfers, financial transactions or value storage. It is possible to exchange these assets for goods, services, money (euros, dollars…) via online exchange platforms. The difference is that transactions can be completed very quickly, cheaply and with the utmost anonymity. Cryptocurrencies like Bitcoin or Litecoin escape any banking or governmental control.
All information about cryptocurrency transactions is stored as copies in a file network called blockchain (or blockchain). This decentralized network serves as a central bank for both listing all cryptocurrency transactions on a large ledger and issuing regulations. Opened and viewable by everyone on the Internet, this huge registry contains written records of the amount of each transaction, an address of the sender and receiver and a cryptographic fingerprint. However, this is not the case with some virtual currencies like Dash, which has put in place a mix of transactions so that they are untraceable. Thanks to cryptographic technologies, transactions are otherwise unfalsifiable and inviolable. The blockchain is not managed by humans or regulated by financial institutions, but by open source software distributed over computer networks around the world.
Bitcoin: the first cryptocurrency
Can not talk about cryptocurrency without talking about bitcoin. Created in 2009 by a certain Satoshi Nakamoto, whose true identity is still unknown, bitcoin is the first and best known cryptocurrency. This alternative to traditional currencies relies on a decentralized peer-to-peer computer network, that is, it is not subject to the rules governing the banking and financial markets or to any authority. On paper, bitcoin has many advantages. Starting with the security of transactions that are encrypted and tamper-proof, making bitcoin a particularly safe currency.
Modifying a bitcoins transaction on the blockchain is impossible because you would have to be able to access all the computers in the network. The other advantage of the most famous cryptocurrency is that it allows to make purchases, transfers or financial transactions without having to indicate his identity or his address. The downside, this lack of traceability and legal framework makes bitcoin one of the most used currencies by criminal networks officiating especially on the dark web. Despite this, the number of online merchants and merchants to make purchases in bitcoins increases a little more every day (see the list on the French Bitcoin site)).
It must be said that one of the other advantages of the virtual currency, and not least, is that it is possible to send or receive payments online without any fees. When we know that companies pay a percentage on each traditional banking transaction, we understand better the craze for virtual money. The bitcoin exchange rate is very volatile and has increased by almost 600% in 2017! In January 2017, it was worth $ 1,000 a unit, against a little less than $ 6,000 currently. Note that the total amount of bitcoins in the world is limited to 21 million and not one more. This limitation desired by its creator gives real value to the bitcoin (Bitcoin Lite Trezor Electrum) which, according to some specialists, is similar to that of precious metals.