cryptos bitcoin litecoin ethereum

Cryptos and Blockchain for Beginners

The future is all about cryptos. Better yet, the future is already here. Crypto field is a vast field to explore, but so far, the exploration proved to be mainly successful. Questions regarding cryptocurrencies and blockchain arise every day. However, most of the fintech experts agree that blockchain technology has revolutionized the industry.

First and foremost, the main impact of this technology lies in the fact it expels intermediary out of the picture, without changing the outcome. Actually, the result is even more favorable for those trading in cryptos because there are no banks, for example, taking their percentage for every transaction while at the same time taking some time to process the money. Let alone the potential security risks related to assets being exposed to the so-called “third party”. Therefore, the main advantage of cryptos and blockchain is instant processing, lower costs, and significantly higher security. Additionally, blockchain technology enables the transparency of the entire transaction, which is then easy to audit. Another interesting advantage of using blockchain technology is the fact it enables micropayments. This means that people can make payments using just a fraction of a cent for reading a fraction of a content from a certain site, for example. Let us take a closer look at these features.

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Cryptos and Top-Notch Security

Blockchains can be private (permissioned), and public (permission-less) like Bitcoin and Ethereum.

Blockchain is an online wallet stored by a third party on their server. This is a cozy solution for first-time users, as some providers keep backups while also allowing you to back up yourself.  This decentralized system enables superior security compared with a traditional centralized system.  All transactions through blockchain are transparent and all history and balances can easily be tracked. Additionally, both parties involved in a process (a payer and a collector, for example) are sharing the same “book” of records.

Blockchain technology also enables users to agree or disagree on the view of the online wallet. In case there are users who disagree with the rules by which the “wallet” is protected and updated, they can form a “fork”. What happens is that bitcoin blockchain then splits into two separate blockchains with different protocol rules, in line with the preferences of the users who support it. This way, no one is obliged to comply with enforced set of rules.

Blockchain Vs. Traditional Systems

Comparing the cryptos and blockchain technology on one part and banking system on the other, once again goes in favor of the new technology. Namely, using online blockchain is much easier than opening an account in any of the traditional institutions. While the bank or an investment fund can invest your money into ventures without asking for your permission, this scenario is unimaginable with cryptos. Although, you should know that you will not be earning interest for keeping your cryptos stored like you do in traditional bank systems. High security, very low risk.

Bitcoin has become the mainstream, and cryptocurrencies, in general, have developed into so much more than mere currencies. The phenomenon is becoming a part of a daily life and it is changing not just the way we invest or spend our money, but it is transforming the entire economies on a much higher scale.

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