As cryptocurrencies continue to gain popularity, there is a corresponding rise in questions about investing in them. Understanding the basics of how these digital currencies work and keeping up with developments in cryptocurrency news is key to knowing your options.
The first cryptocurrency, Bitcoin, was invented in 2008. The main attributes of a true successful digital currency is that it is decentralized, transparent and immutable. This means it is not controlled by a central authority such as a government or a bank. As a corollary, its value is better able to be insulated from outside factors and it is less vulnerable to problems such as inflation.
On a basic level, a digital currency operates similar to peer-to-peer file sharing. In this case, the file is money instead of a picture or a film. Everyone who participates in the sharing network has a record of every transaction that occurs within it. This mechanism prevents double spending.
Once a transaction is sent, it needs to be confirmed. The entire network sees the transaction immediately. Bitcoin miners confirm the legitimacy of the transaction and enter it as part of the blockchain. From this point onwards, the transaction cannot be forged or reversed.
Cryptocurrencies operate based on a system of cryptography that prevents many of the issues that would arise from having them governed by a central authority. The system of encryption ensures, for example, that mining cannot be counterfeited and that a bitcoin address cannot be compromised. It also regulates the amount of bitcoin that can be generated within a period of time. It works effectively to minimize the impact of human error, fraud and other factors that tend to destabilize currencies in general.
Latest Updates in Cryptocurrency News
Currently, bitcoin price continues to be on the rise. Many people see an increased interest in cryptocurrencies as a result of decreased confidence in traditional currencies brought on by escalating political and economic uncertainty.
With the success of bitcoin, competing cryptocurrencies are also entering the market. In addition to Facebook’s Libra, banks like Wells Fargo are also turning to digital cash and using blockchain as a more secure, rapid way to transfer fund.
On the other hand, currencies that are departing from the major principle of decentralization may be in trouble. EOS, a major blockchain, is seeing contributors, including some of the original developers, leave due to concerns that the largest token holders have too much influence over the structure.
In many countries, cryptocurrencies have their own trading exchange. This exchange may be subject to its applicable laws and regulations. Currencies that do not comply may become delisted. In particular, cryptocurrencies that use privacy coins may need to meet requirements designed to prevent their use for money laundering and other illegal purposes.
In addition to digital cash, blockchain technology may soon be used to create digital SIM cards. Verizon recently received a patent for the development of this technology, which could replace physical SIM cards.
Keeping up with bitcoin news and other cryptocurrency updates is a major part of staying abreast of today’s financial developments. Check out our news page for the latest information on new technologies, bitcoin price and relevant updates.