“Cryptocurrency” is a term that may seem frightening; it is neither more nor less than an electronic currency used in peer-to-peer on the Internet. Moreover, as the name suggests it is also encrypted.
It is injected into the virtual world through Blockchain technology and a powerful mathematical calculation system “mining” supported by a network of computers connected 24 hours a day. The Blockchain allows a single, anonymous and secure stream. Mining, which is based on a remuneration principle of the P2P network, provides an additional guarantee as to the authenticity of the transaction chain by adding a new block.
There are as many Blockchain protocols as crypto-currencies. We can all create cybermonnaie or “miner”.To date, there are more than 800 crypto-currencies. The most famous being: Bitcoin and Ethereum.
Reality versus Virtuality
- Cryptocurrency works, in part, like any conventional currency: it is an asset that feeds a wallet, which serves as a means of payment or exchange on the internet, and can be converted into another currency (cyber or not). Only downside: there is no currency restoration system in case of an electronic crash.
- This asset can also be side on stock exchanges dedicated to cybermonnaies.
- Moreover, unlike a palpable currency, its price is not indexed to the value of gold or the amount of fiduciary coins. Nevertheless, trading is still a common practice, as e-money is a very volatile currency. No risk of inflation, it gains value with speculation.
- The legal status of a cryptocurrency differs from country to country, some allow trade and make it taxable as soon as it leaves its virtual environment. In other countries, cryptocurrency has a slightly vaguer or even illegal status.
- However, it is neither governed by politico-banking rules nor by a central bank and can not be recorded in the balance sheets.
To a Currency 3.0?
With the dematerialisation of uses, customer experiences becoming more and more digital, the various transformation projects, and more. Can we imagine a 3.0 economy in which cryptocurrency would have its place? Can it fit into our financial institutions?
Its use is increasing rapidly, more and more networks/businesses are opening up to crypto-currencies, more and more people are interested in crypto-currencies and investing in cyber-actions, some would even use it as funding fund to build their start-ups. However, despite this craze and the principle of transparency on which a cyber-currency is based, many equate it to Dark Net and other fraudulent facts. Read more about it in https://www.amarkets.com/trading/expirations/.
Cryptocurrency also has a limit of expansion
its value cannot exceed a certain threshold. Once reached, a new currency will take over.
What about energy consumption to supply the entire network necessary for the propagation of cyber currency.A possible future in our daily life?It is, for the moment, trying to position and bet on the future of cryptocurrency. However, financial institutions would be more interested in Blockchain technology for future uses.