Cryptocurrencies are digital currencies that are supported by blockchain technology. The main concept of cryptocurrencies is to be decentralized, safe and secure methods of payment and transactions. Cryptocurrencies are created by many groups and organizations, such as the Federal Reserve, Digital Currency Group, Bitcoin Foundation, Ethereum Community and so on. Each group has its own vision for what a cryptocurrency should look like. As a result, there are hundreds of different cryptocurrencies in the world today.
Early cryptocurrencies are limited in number, making them ideal for gamblers looking to make bets on the future price of a cryptocurrency. For example, Bitcoin has only 21 million units- meaning there are only ~0.15 bitcoins left in circulation. This scarcity makes every unit valuable. Another early cryptocurrency, Ethereum, was intended to be used as a programmable currency. This meant it could have applications beyond digital currencies- such as computer programming or artificial intelligence. As a result, there are many different types of early cryptocurrencies.
Since cryptocurrencies are digital and decentralized, they do not require a physical location to exist. However, most modern cryptocurrencies have an underlying blockchain system located on a specific geographical location- known as the cryptocurrency’s core or heartland. The primary purpose of this is to help combat theft and fraud in the cryptocurrency environment. In addition to protecting the core’s heartland from theft, the core team will also provide 24/7 support services for their home base. Furthermore, the team will usually choose a safe and secure place to store their cryptocurrency reserves while they’re away from their home base.
Various groups have identified unique use cases for cryptocurrencies that were not initially anticipated when this innovative technology was first conceived. For example, cryptocurrencies can be used by individuals as an alternative to expensive financial institutions and government agencies. Further, cryptocurrencies can be used by businesses as an alternative payment system to current archaic practices such as paper money or cheque payments. Additionally, cryptocurrencies can be used by investors for speculative purposes- buying low and selling high on the price of a particular cryptocurrency. Finally, consumers can use cryptocurrencies as a replacement for remittance payments sent from one country to another within the same currency zone.
Despite recent setbacks, the cryptocurrency industry remains vibrant and dynamic enough to captivate global attention and interest among millennial users and investors alike. To address this growing market, major banks have recently launched their own versions of cryptocurrency known as DLT platforms or digital currencies platforms. Given recent developments in this growing industry, we can only wait and see what is yet to come!
