The Business of Cryptocurrencies
From its involvement in recent cyber attacks against global corporations to its passing of $60,000 in value in April 2021, bitcoin is becoming a focal point in business and the public. Some say that bitcoin is the future currency, replacing credit and debit cards as well as cash. Some are more skeptical, seeing bitcoin as highly volatile and too risky of an investment. However, a majority of the population doesn’t know the basics of cryptocurrency.
According to Forbes, bitcoin, and cryptocurrencies in general, is a decentralized digital currency that can be bought, sold and exchanged directly without need for an intermediary (i.e., a bank). Bitcoin itself is code that is recorded on a ledger.
The cryptocurrency’s alleged inventor(s), using the pseudonym “Satoshi Nakamoto,” state that there is a need for “an electronic payment system based on cryptographic proof instead of trust.” To overcome the need for trust, a new technology was utilized: blockchain.
A blockchain, according to Oxford Languages, is a “system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers.” That is a simplified definition. Euromoney states that those on the system, therefore, can check the record for any suspicious transactions, creating a system of strong financial security. For an expanded understanding of what blockchains are, Simply Explained video, “How does a block chain work,” is a great source.
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