Cryptocurrency is a digital asset used mainly as a medium of transaction to secure financial transactions, control creation of additional assets and verification of any asset transfers with the help of a strong cryptographic technology. It is also known as a form of digital currency or virtual currency. Unlike central banking systems, it is a decentralized control and financial transaction system that works through a blockchain used mainly for financial transactions.
The first decentralized virtual currency to be developed in 2009 is Bitcoin known as a virtual monetary unit and it works independently without the assistance of any central bank or administrator. Since then, around 4000 altcoins of diverse variants of bitcoin have been developed Tabtrader review . Bitcoin is considered as a peer-to-peer electronic cash system where users perform transactions directly without any intermediates.
Blockchain is a data file consisting of numerous blocks that keeps records of all the previous bitcoin transactions and also creation of new ones. The normal average time between each block is around 10 minutes. The most frequent use of bitcoin, is supported by an external software named Bitcoin wallet. By using this software, one can easily store, receive and manage the transaction of bitcoin units. In order to perform transactions using bitcoin, one needs to have an account in any one of the bitcoin exchanges across the globe and has to transfer fiat currency into that account. Thus the account holder can perform future transactions by using these funds. Apart from the bitcoin, some of the other sources of cryptocurrency is petro which is mainly used for oil and mineral reserves.
There are some pros and cons associated with the usage of digital currency. The main benefits of using a virtual currency are as follows:-
• Provides a quick transparency layer:-
The Bitcoin usually operates with the help of a ledger called Blockchain that records & monitors each and every transaction. Once when a transaction is made and is recorded in this ledger it is considered to be as static. These transactions can be further verified at any time in the future and hence in addition to this, it also ensures security and privacy regarding all the transactions made through a particular account.