Justus Nafuar

What You Need To Know About Cryptocurrencies Cryptocurrencies are digital currencies used as medium of exchange to complete financial transactions. You have probably heard about cryptocurrencies. When it comes to the fine, little details of these digital currencies, only a few people seem to understand much. Yet they remain a hot debate too good to be ignored. So far, the they have attracted a great audience around the world. A study by Abeer Elbahrawy et al. reported that by June 2017, the market value of the cryptocurrencies had increased beyond the $100 billion mark. This is a remarkable feat indeed. If the above finding is true, you have a solid reason to get interested. Looking to understand a few interesting things about these coins? The following points may be useful to you. 1. Cryptocurrencies Exist in Several Different Types Bitcoin is the most commonly known. But it is just one option of the various cryptocurrencies in the world. Its singular fame is due to the fact that it was released before others. The other substitute cryptocurrencies are collectively referred to altcoins (alternative coins). These altcoins came after Bitcoins. They are improvised versions with better features. For example, the transaction time for Ripple (XRP) is about three seconds, Bitcoin takes about an hour. Ethereum offers the most reliable smart contract applications, Bitcoin can do that but not efficiently. Statistically, over 1500 altcoins have been released in the market. You may need to know some like Ethereum, Litecoin, Swiftcoin, Gridcoin, Monero, Ripple, Zcash, Primecoin, Dash etc. The list is huge. Yet the blockchain market will continue to experience new better releases. 2. The Blockchains Can’t Be (Easily) Altered The blockchain has a series of blocks which are interconnected. Each block can be equaled to a bank statement (It contains unique transactional information of a participant). Blocks represent complete, genuine, secured trade records that can be shared between market participants The blockchain can never be backdated, copied, or modified for any benefits including stealing. This is good news. Any such attempts mean that new successive blocks should as well be changed. Thus crime accomplices will need to be supported by the other market participants to achieve that. Otherwise, blockchain records cannot be modified. However, this cannot guarantee total security from cyberattacks. Heard of the challenges banks face due to major hacking attempts into customer databases? Or interference of the client transaction histories? If a customer’s account is hacked, the bank probably bears the primary criminal liability. This is a major con which centralized systems must endure in controlling financial exchanges. 3. Decentralized Control of All Financial Transactions The Blockchain technology is the ultimate system of keeping records for cryptocurrency transactions. It also controls the main supply of crypto coins. All public financial transactions can be controlled through a decentralized system of blocks. The public information is saved in the blockchains and can be easily shared among network users. Blockchain users can then comfortably follow up all their trade activities on these decentralized blocks without an intermediate central institution. Cryptocurrency transactions are not controlled through a central authority such as a central bank. While the decentralized system comes with goodies, the crypto coin market platforms are becoming increasingly unsecure for investors. Hackers can easily manipulate the server systems to steal from you. As an individual or company seeking to invest in these schemes, it will be advisable to seek self-protection first. This will save you or your company from the cruel hands of the criminals around the internet. 4. Wide Range of Incredible Uses The world is being revolutionized through the cryptocurrencies. Just in 2009, bitcoin was the buzz word. It is now 2018 and over 1500 different coins have been created. This exponential growth represents a positive market response. The uses of cryptocurrencies can be summarized as follows:     Capital management; Making payments; Time stamping; Elimination of fraud and encouragement of integrity in internet business transactions;  Retail transactions can be made possible with time. For example, in travel, hotels, housing etc.  Effective monetization of online content through stream token. This will save many online business owners time and energy.  You can pay for your education using cryptocurrencies e.g. at The University of Nicosia in Greece. Obviously, the list of uses will only become longer as time passes. Despite the uncertainties surrounding the market space, more cryptocurrency uses will still pop up. 5. Major Companies In The World Using Cryptocurrencies A post on Nasdaq, Inc. website enlists reputable companies currently accepting cryptocurrencies for their products. For example, Microsoft, Overstock, Shopify, PayPal, Expedia, Pizzarforcoins. Apart from Overstock and Pizzaforcoins, the other four accept only Bitcoins. Retailers CheapAir, Dish, Newegg and Gyft among others are actively using crypto coins. In China, the government banned the use of cryptocurrencies in trade. However, the Peoples’ Central Bank of China is considering to improve the digital currency technology. This will be achieved through directed research on the existing Cryptocurrency architecture. The aim is to create a Chinese-based digital currency. All spoken, numerous companies are contemplating the adoption of these currencies. The findings of the Neustar International Security Council (NISC) state that most organizations in the world would consider using cryptocurrencies. If these are true, then the world’s financial trade platform will experience a significant revolution. 6. Bitcoin: The Ground-breaker, But Is Going Down This sounds like a lie or a crazy joke. And yes, this crypto coin remains the clear leader in the industry. That is undisputable! But some studies have indicated that Bitcoin’s market share is gradually falling. For example, a study by Abeer Elbahrawy et al. shows Bitcoin market trend steadily falling between the years 2014 – 2017. The emergence of more new digital currencies with better features like Ripple and Ethereum, are giving Bitcoin a worthwhile competition in this market space. The table below shows Bitcoin market capital behavior between 2014 – 2017 from that study: During the four years, the market capital of the other (top five) cryptocurrencies increased as seen above. Now you can believe, at least based on the study. To push Bitcoin at the bottom will not be easy, but it is definitely possible. 7. Unbelievable Cryptocurrency Worth $1.1 Billion Stolen This Year Alone! Can you believe the statistic above? It surely hurts. On June 7, 2018, one CNBC headline read like this: “$1.1 billion in cryptocurrency has been stolen this year, and it was apparently easy to do”. Yet it was only mid-year. It happens that in just less than a decade, a total $11.3 Billion has been lost. These whopping losses due to illegal cyber trade are drawing a caution line for investors. This shows that cyberattacks are very rampant in the market. Serious questions regarding the vulnerabilities in the blockchain technology should be asked. There is no assured security in the cryptocurrency blockchain. Really? Yes. Just like other software, ultimate protection is not guaranteed. Dark web has become the effective place that hackers use to perform cryptocurrency crimes. On this internet platform, they (hackers) are able to penetrate your personal or company databases. You cannot be able to track or trace them. They use specific malware to access the accounts and records. They will then demand ransom in form of hefty cryptocurrency after they hack your system. Or they will just go straight into business; they plunder every single coin you have invested. Blockchain users can apply self-protection procedures to be safe. They should practice basic computer security (no unwanted apps) and observe a disciplined online habit (keep safe passwords). Bottom Line There’s no doubt the cryptocurrency market is experiencing exponential growth. More people and companies are beginning to buy the idea. Even the Chinese. Cryptocurrencies are many; the famous Bitcoin, Ripple, Ethereum, Monera, Litecoin among others are active in the market. Bitcoins have been in circulation since 2009. They were the first to be introduced. The digital currencies can be used to make payments for purchases. Other vital uses like capital management, fraud-resistance, time-stamping etc. are drawing interest from investors around the globe. Think of large retailers like Microsoft, Shopify, Overstock (the list is long) which have accepted mostly Bitcoin. Control of all currency transactions is decentralized – there is no central intermediary system to regulate currency exchanges. The puzzle of cyberattacks. The vulnerabilities of the whole blockchain stuff. Hackers! Yet the urge for investment is almost inevitable in individuals and companies alike. Individuals and companies have suffered huge losses. At the moment, it might not be wise to invest in the cryptocurrency projects. Perhaps besides self-protection, the architects of the cryptocurrency exchange platforms MUST begin to build those systems with extraordinary security features. The criminals will be kept off, and trade will be smooth for legitimate market participants.