As the world becomes increasingly digitalized, it is no wonder that most of the transactions now take place online. This means these transactions are not tied down due to geological constraints. Two people located hundreds of miles apart but connected by the Internet can now engage in just about any form of transaction and interaction.
With the elimination of the geological obstacle, another hurdle came into play, namely the transfer of funds. With the availability of several banks, currencies, and policies, transferring funds was too much of a hassle and the risk of scams and frauds was high.
But this was true only before the arrival of cryptocurrency, a form of decentralized digital currency. As the name suggests, there are two components at work in cryptocurrency-currency and cryptography. How it works is that users from opposite ends of the world can now engage in monetary transactions by purchasing this form of digital cash at one end and cashing it at the other. For each transaction, an entry is made in a database to avoid issues like double spending, which is highly probable due to the lack of any physical bank notes. The transactions are protected using complex cryptography algorithms derived from mathematical theories and principles.
The pioneer in the field of cryptocurrency is Bitcoin. A phenomenal system designed by Satoshi Nakamoto, Bitcoin provides the perfect solution to the issue of transferring funds.
Bitcoin bridges the gap between individuals using different currencies or having associations with different banks, by providing them with a universal currency- Bitcoins. Bitcoins can be acquired in exchange for the currency you use and then those Bitcoins are transferred to your intended recipient, who will then again exchange the Bitcoins for money in their currency. It is a form of peer-to-peer technology, which implies that there is no middle party, like banks, involved in the transactions. Each user deals directly with the other user.
Features of a Cryptocurrency Transaction
Some properties of transactions performed using cryptocurrency are listed below.
Due to the public key cryptograms employed to encrypt each transaction, it is virtually impossible to intercept the transactions or to decrypt the code. Experts suggest it might be easier to break into Fort Knox than to hack a Bitcoin address.
It is impossible to cancel, reverse or delay a cryptocurrency transaction. Hitting send on a Bitcoin transaction sets the transaction in motion and cannot be reversed. If you want the cryptocurrency refunded, then you need to ask the recipient to initiate a new transaction with you as the recipient this time.
Global and Efficient
As stated before, cryptocurrency transactions are not bounded by geography. You can send cryptocurrency within minutes regardless of their location. The time taken to send Bitcoins to someone in the same building as you is roughly equal to the time taken to send Bitcoins to someone residing on the opposite end of the planet.
Since you are not associated with any banks, accounts etc., your transactions are fairly anonymous. A computer randomly generates and associates an address to your transaction. Although it is possible (but not easy) to track the address, but it is impossible to find out the person associated with that address.
Anyone can use Bitcoin and all other forms of cryptocurrency. You don’t need permissions or accounts or memberships. All you need to do is download and install the free software, and initiate transactions immediately.