The history of transacions started with barter. Someone wanted to exchange one type of goods for another. He found a guy who needed his goods nad, coincidentally, had the other type of goods. They agreed and so it begun, the world started to exchange goods. Later on, someone realized there is no need for direct exchange of currencies. That led to creation of money. Firstly, it was gold and silver. Its value was secured because gold and silver were extremely hard to obtain. Few centuries later countries started to create money. Its value was secured by technologies used to print it. Governments were (or they thought... and think they were) the only one to prepare such document, that represents some value. People trust governments to some point, so currencies become way to perform transactions. Nowadays, money is partially physical currencies, and partially entries in databases of banks and credit card providers. What has not changed from dark ages, is that we trust some higher power (government) to maintain value of its currency. Some people try to break government's monpoly for currencies with cryptocurrencies. They believe that there is no need to believe in some organisation, if one can restrict amount of currency that will be generated. Trust of users in self-handling currency environment is all they need. Cryptocurrencies will behave as creator wants them to. There will be no money printing in times of need, there will be no physical carrier. This seem pretty nice. On the other hand cryptocurrencies have some problems, like number of transactions that they can handle per second. As I recall Bitcoin can take as much as 7 per second, while MasterCard (for example) about 4900. Cryptocurrencies might be the future, but they are still in their baby years. Take a look at this TED presentation:
https://www.ted.com/talks/neha_narula_the_future_of_money
and tell me what do you think about this concept? Would you trust cryptocurrencies? Maybe you invest some money in Bitcoin or Litecoin?
https://www.ted.com/talks/neha_narula_the_future_of_money
and tell me what do you think about this concept? Would you trust cryptocurrencies? Maybe you invest some money in Bitcoin or Litecoin?
Comments
Electronic payment is convinient for people. But for me risk that someone steals your money is bigger than when you have cash in your wallet. I know that banks have a lot of ways to protect your money but there are people who can break them.
Honestly, the only cryptocurrency, which I know more about than just a name it's Bitcoin. It seems to be unusually profitable investment - recently Bitcoin has tripled(!) its value in 12 months. On the other hand, I don't understand people who invest all of their money in cryptocurrencies. I believe it's important to diversify your ivestments in order to reduce the risk.
1) Fraud: Cryptocurerncies are digital and cannot be counterfeited or reversed arbitrarily by the sender, as with credit card charge-backs.
2) Identity Theft: When you give your credit card to a merchant, you give him or her access to your full credit line, even if the transaction is for a small amount. Credit cards operate on a “pull” basis, where the store initiates the payment and pulls the designated amount from your account. Cryptocurrency use a “push” mechanism that allows the cryptocurrency holder to send exactly what he or she wants to the merchant or recipient with no further information
3) Immediate Settlement: Purchasing real property typically involves a number of third parties (Lawyers, Notary), delays, and payment of fees. In many ways, the bitcoin/cryptocurency blockchain is like a “large property rights database,” says Gallippi. Bitcoin contracts can be designed and enforced to eliminate or add third party approvals, reference external facts, or be completed at a future date or time for a fraction of the expense and time required to complete traditional asset transfers.
4) Access to Everyone: There are approximately 2.2 billion individuals with access to the Internet or mobile phones who don’t currently have access to traditional exchange systems. These individuals are primed for the Crytocurrency market. Kenya’s M-PESA system, a mobile phone-based money transfer and micros financing service recently announced a bitcoin device, with one in three Kenyans now owning a bitcoin wallet. (Let me repeat that again. 1/3)
5) Lower Fees: There aren’t usually transaction fees for cryptocurrency exchanges because the miners are compensated by the network (Side note: This is the case for now). Even though there’s no bitcoin/cryptocurrency transaction fee, many expect that most users will engage a third-party service, such as Coinbase, creating and maintaining their own bitcoin wallets. These services act like Paypal does for cash or credit card users, providing the online exchange system for bitcoin, and as such, they’re likely to charge fees. It’s interesting to note that Paypal does not accept or transfer bitcoins.
Of course like anyone who remembers a time when bitcoin had an exchange rate of $1 I regret not spending a few hundreds on purchasing it:) But it's nearly impossible to foresee things like these.
Firstly, Bitcoin is able to support illegal activity. According to Mercedes Kelley Tunstall of Ballard Spahr LLP, "Bitcoin has built its reputation and structured its virtual currency around being both anti-government and anti-establishment." That's why it is believed that it can be used anonymously for illegal or antisocial acts. If you scroll over offers in deep web (especially illegal categories), you can see that it's true. It's very often that something illegal is sold for bitcoins.
Secondly, I heard that there's high risk of loss. I don't know much about it, so I won't try 'to be an expert', but I just want to say that there are also disadvantages which we should remember about.
Many people still have no trust to things in the Internet and don't even use their bank services via Internet so I think it will take a long time for people to use it in everyday use.
Taking into account banks have no control over cryptocurrencies, they will try to decrease their popularity.
For now, I don't see why should I change a regular currency to a cryptocurrencies, but some day I'll explore this topic deeper and maybe decide to store some money there.
The main reason is security.
Bitcoin is constructed on this way that in order to keep your money safe you need to create your virtual wallet.
However it is protected by a suitable cipher, this does not preclude hackers.
By using service platforms, where wallet access is required, this wallet can be hacked easily.
Another problem is limited availability.
Not every store offers currency payment, and once the choice is limited to popular brands.
Despite the above mentioned disadvantages I find cryptocurrency worth to use. Although accessibility and security are far away from my expectations, I believe that this problem will be solved before long by creating new solutions, algorithms, ideas.
I've heard that cryptocurrencies are main currency in darkweb, even for illegal stuff like hitman or drugs.
Maybe in the near future I will try Bitcoin for some small online shopping.
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