The global economy is inevitably moving towards a digital eco-system. From investment to money transfer, everything is going paperless. The newest and most promising addition to the digital payment sector is cryptocurrency.
A cryptocurrency is a medium of exchange like normal currencies such as USD, but designed for the purpose of exchanging digital information. Cryptocurrency is defined by Investopedia.com as a decentralized “digital or virtual currency that uses cryptography for security” making it difficult to counterfeit. Since it is not issued by a central authority, governments can’t take it away from you.
Over the last couple of years, digital currency has been rapidly gaining the public eye. Here are some good reasons behind it.
• Fraud-proof: When cryptocurrency is created, all confirmed transactions are stored in a public ledger. All identities of coin owners are encrypted to ensure the legitimacy of record keeping. Because the currency is decentralized, you own it. Neither government nor bank has any control over it.
• Identity Theft: The ledger ensures that all transactions between “digital wallets” can calculate an accurate balance. All transactions are checked to make sure that the coins used are owned by the current spender. This public ledger is also referred to as a “transaction blockchain”. Blockachain technology ensures secure digital transactions through encryption and “smart contracts” that make the entity virtually unhackable and void of fraud. With security like this, blockchain technology is poised to impact nearly every segment of our lives.
• Instant Settlement: Blockchain is the reason why cryptocurrency has any value. Ease of use is the reason why cryptocurrency is in high demand. All you need is a smart device, an internet connection and instantly you become your own bank making payments and money transfers.
• Accessible: There are over two billion people with access to the Internet who don’t have rights to use to traditional exchange systems. These individuals are clued-in for the cryptocurrency.
• You are the owner: There is no other electronic cash system in which your account is owned by you.
How it started?
Bitcoin was the first decentralized cryptocurrency introduced in 2009. Bitcoin uses the blockchain technology and has outperformed gold generating a 155% annualized gain over gold’s 6% annualized loss over the last 5 years. Its price in July 2010 at 0.06/coin USD is now worth over 4000.00/coin USD today, making it one of the biggest investment phenomenon in modern history. Since 2009 blockchain technology has gained momentum. Not only because of the tremendous spike in Bitcoin’s worth, but also through an increased awareness of its importance and greater trust among the investors.
Recently, major banking institutions and technology companies such as Intel, Barclays or Walmart have invested their time and money into the promise of cryptocurrencies like Bitcoin and Ethereum. This has led to countries with weakening currencies to adopt digital currency to take the place of traditional notes that have depreciated. Some of these early adopter countries include Brazil, Colombia, Turkey and Venezuela.
Wealthy countries are also exploring adopting cryptocurrency as legal tender. According to a report by Bloomberg, the central banks of Japan, European Union and Holland are currently conducting research projects and trials on digital currencies.
The cryptocurrency revolution is also spreading to India, where Prime Minister Narendra Modi has reduced circulation of cash bills to steer the country towards electronic payment ratification. The Reserve Bank of India is now looking into the newest wave of the future — cryptocurrency.
A year ago, the Indian government decided to take harsh measures against “black money”, funds earned on the black market on which income and other taxes have been evaded, and tax evasion by removing two of their highest value banknotes from circulation resulting in removing over 22 billion banknotes in circulation. As a result, citizens worried about losing their savings, switched to cryptocurrency to preserve their funds resulting in a trading volume spike of cryptocurrency. Since cryptocurrency is decentralized, Indian regulators are currently working on a legal framework regulating cryptocurrencies such as Bitcoin as well as the central bank of India is developing their own blockchain resulting in its very own cryptocurrency that will be called “Lakshmi”.
Blockchain technology has also enabled companies to change the way they operate digitally. Through Initial Coin offerings (ICOs) companies are offering their digital tokens for sale. While many companies raising funds through ICOs are unregulated and lack validity, companies such as 1World Online, an established Silicon Valley company, already have a working product.
“Our customers, publishers, services and brands will both immediately and overwhelmingly witness an uptick in interactivity of their already successful 1World campaigns. We’re providing a truly win-win-win model between users, publishers and services offered to them. There will be no more conflict between positive, interactive user experiences with monetization via ads and other services.”
The blockchain economy is worth more than 100 billion dollars to date and the future of its adoption is being championed by people around the world and companies, such as 1World Online, that are using tokens to enhance their platforms–and reward users. India, with its large base of consumers, engineers, and entrepreneurs, is poised to become a world leader as more and more blockchain participation, investment, development, and mining occurs within its borders. Are you ready to join the future of the online economy?