Introduction to Cryptocurrency

Prof. S. Thilak, Assistant Professor, Department of MBA, Sankara College of  Science and Commerce

 Introduction

          Cryptocurrencies is a Digital Asset used as a medium of exchange in Internet which uses the cryptographic functions to manner financial transactions. Cryptocurrency is also known as BITCOIN there are various types of cryptocurrencies like Digital Token, Tokens, Digital Assets, Digital currency, virtual currency, crypto coins and Digital coins. Cryptocurrencies are more like stock than Fiat currencies like the US Dollars. This is which the practice of techniques for secure communication.

History and Future of Cryptocurrency

            Cryptocurrency was first introduced in a white paper by Satoshi Nakamoto in the year 2008. In the year 2009 this was changed as Open sourced software and in the year 2010 the total control was handed over to Bitcoin core developers. The introduction of ‘altcoins’ was started in the year 2011.

            There are 100 of Bitcoins are in the market. ICO’s (Initial Cryptocurrency Offer) is regulated on crowd funding, ICO’s are becoming an attracting option for raising capital for start ups and even for more establishing companies. The Government and banks have to adopt this block chain because of Increased competition and many fake ICOs. If the Government or the bank adapts, the regulation will be created and the market will become more stable and the payment process will be more compatible.

The Features of Cryptocurrency

• They are irreversible, once person has invested in an option, they cannot change it to any other option or withdrawn.
• Fast Transaction, where ever the person be the transaction of the cryptocurrency is faster than any other transactions including banks.
• Secured, nobody knows your identity and this is to protect the investors identity and for security reasons.
• Your funds are safer than in a Bank.
• Cryptocurrency is easy to get started.
• Controlled supply could boost value overtime.
• Banks cannot touch you, because this act as a monetary body.
• Self-interested quality control.
• Processing Fee or the commission are be charged at the lowest.
• Easy to use and anybody at any age group can buy and sell cryptocurrency at any quantity.

Types of Cryptocurrency

            Hot and Cold Wallet: Cold wallet is not connected to the Internet and Hot wallet is either connected to the internet or is located on it.

            Software wallet needs to be installed on electronic device which has two options Desktop wallet which is installed in Computers and Mobile Wallet which is installed in Mobile phones or tabs.

            Online Wallets: It is considered to be a hot wallet and needs to access to a browser and internet, it is least secured and private keys are stored on a server.

            Hardware Wallets: Stores private keys on a physical device, the device is resembling a USB and it is process are simple to use.

            Paper Wallets: This the first form of a cold wallet before hardware wallet, paper wallet is a physical copy or printout of your keys, software is used to generate keys and investor print them out and Scan QR code or enter private keys to transfer funds from wallet.

Cryptocurrency Exchange

            The cryptocurrency exchange is a website where you can buy and exchange digital currency the person has the option to trading between different crypto-coins or traditional fiat money like US dollars. These are the exchange like traditional stock exchanges, traders make transaction based on the cryptocurrency market price. The intermediaries charge the commission for the transaction exchange or trading platform, direct trading and brokers. The fees are based on their choices they don’t have fixed market price.  It also depends on the location, reputation, exchange rate, fees, payment mode etc.