Since their launch, cryptocurrencies have been surrounded by questions, skepticism and debates. What are cryptocurrencies really? Beyond a method of payment, what are the other functions of cryptocurrencies? Are blockchain and cryptocurrencies the same? And the list goes on.
The biggest question of all is how are these new technologies going to impact the world? Thanks to their underlying technology, these digital currencies are on track to cause a much needed shift in how users gain access to capital.
What is Cryptocurrency?
If you’re unfamiliar, cryptocurrency is a decentralized digital money that’s based on blockchain technology. You might’ve heard of or are familiar with the most popular versions, Bitcoin and Ethereum. However, there are actually more than 5,000 different cryptocurrencies in circulation today.
How Does Cryptocurrency Work?
On top of being decentralized, cryptocurrency is a medium of exchange that is digital and encrypted. This means there is no central authority that manages and maintains its value. These tasks are broadly distributed among the currencies users via the internet.
Essentially, a blockchain is an open ledger that records transactions in code. The transactions are recorded in “blocks”, linked together on a “chain” of previous transactions. Each user has their own copy of this history, which is updated simultaneously with new information. Fraud is prevented through two techniques: proof of work and proof of stake.
How is Cryptocurrency Revolutionizing the Financial Industry
In addition to its ease of use and tightened security, cryptocurrency is transforming the financial industry – one unbanked consumer at a time. According to a 2017 Business Insider article, over 2 billion of the world population are unbanked. To complicate things further, World Bank’s exclusive reports say that 20% of that same population receive their wages in cash.
This has not only led to poverty in certain areas and developing countries, but it has also created incredible barriers for those hoping to start and run a business. Paired with cumbersome paperwork requirements, accessing loans and grants just adds to business owner’s stress and woes.
Cryptocurrencies seek to solve this “unbanked” challenge. In short, since they are digital currencies, crypto offers users an opportunity to seamlessly transpose and receive payments – regardless of their location. They also guarantee faster and cheaper transactions.
If your business is looking for more payment processing options, industry updates and other news, be sure to check out the helpful information the experts at Best Payment Providers offer. Discover the best cryptocurrency payments and other tips you need to level up your business.
Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of best cryptocurrency payments. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice-cream on his backyard porch, as should all right-thinking people.