Category Archives: crypto currencies

Crypto currency – the rise of virtual money

Crypto currencies are becoming more and more popular. More and more people are hearing about Bitcoin, a crypto currency with which they can already buy real goods in some shops. Japan has only recently recognized Bitcoin as an official means of payment. But what are crypto currencies anyway and could they one day replace currencies like dollars or euros?

Wikipedia says the following about crypto currency and bitcoin profit

Crypto currencies are money or fiat money in the form of digital means of payment. They use the principles of cryptography to implement a distributed, decentralised and secure digital payment system. In contrast to central bank money, they are still sourced exclusively by private individuals. However, their qualification as currency is sometimes controversial.[1] The term crypto money is also used in German-language media like this.

A crypto currency is a digital currency created and managed by the use of advanced encryption techniques known as cryptography. The crypto currency made the leap from an academic concept to (virtual) reality with the creation of Bitcoin in 2009. While Bitcoin attracted growing successors in subsequent years, it attracted significant investor and media attention in April 2013, when it reached a record $266. Its value has grown 10-fold in just two months. Bitcoin brought a market value of over $2 billion at its peak in 2013. Meanwhile, a Bitcoin is worth over €1000 and has a market capitalization of over $20 billion.

Will these alternative currencies eventually replace conventional currencies and will they eventually become regular means of payment such as dollars and euros?

Bitcoin – the current standard and ethereum code

Bitcoin – decentralized crypto currency
Bitcoin is a decentralized currency that uses peer-to-peer technology that enables all functions such as currency issuance, transaction processing and verification to be performed jointly from the network. This decentralization frees Bitcoin from government manipulation or interference, and there is no central authority that can withhold the value of a Bitcoin. Bitcoins are digitally created by a “mining process” that requires powerful computers to solve complex algorithms. They are currently created at a rate of 25 bitcoins per 10 minutes and are limited to 21 million pieces, a level expected to be reached in 2140.

Advantages of crypto currencies

Crypto currencies have some advantages over conventional currencies:

Protection against fraud: Crypto currencies are digital and cannot be forged or withdrawn by the sender, as with credit card returns.
Identity theft protection: When you give your credit card to a merchant, you give them access to your full credit line, even if the transaction is for a small amount. Credit cards work on a “pull” basis where the store initiates the payment and pulls the amount paid out of your account. Crypto currencies use a “push” mechanism that allows the crypto currency holder to send exactly what He or She wants the merchant or recipient to send without further information.
Immediate settlement: The purchase of real estate usually involves a number of third parties (lawyers, notary), delays and payment of fees. In many ways, the technology behind crypto currencies is the blockchain like a “large property database”. In the example of Ethereum, whose crypto currency is ether, smart contracts can be designed and enforced to eliminate or add third-party approvals, refer to external facts, or, at a future date or time limit, complete an effort that may be required to perform traditional asset transfers.
Access for all: There are about 2.2 billion people with access to the Internet or mobile phones who do not currently have access to traditional exchange systems. These people are well prepared for the crypto currency market. Kenya’s M-PESA system, a mobile phone-based money transfer and microfinance service, recently announced a Bitcoin device, with one in three Kenyans now owning a Bitcoin wallet.
Lower charges: There are no fixed charges in the crypto world when you buy a crypto currency or Transa