2009 was marked as the birth year of digital currency, as Bitcoin, the pioneer of digital currency rolled out. Digital currency is considered to be the biggest revolution of the 21st century after the social media revolution.
It’s also a proven fact that nobody took Bitcoin serious in its early years of inception. Laszlo Hanyecz in 2010, bought two dominos pizza by using 10,000 Bitcoin. Today prize of that deal is over 2 million and it’s every day going up.
As Bitcoin touched 5000 US dollar in the first week of Sep 2017 and predictions are that it will touch 10,000 by end of the year 2017.
So what exactly is Digital currency and how it works?
Satoshi Nakamoto was the man who created an implementation pattern of Bitcoin. Interestingly nobody ever saw or meet Satoshi Nakamoto.
Digital currency is an electronic currency that is decentralized in nature means it is not owned by any single entity like central banks control the local currency of a country. It’s stored on an electronic ledger that is distributed across thousands of computers across the world.
Whenever there is a transaction, its updated on all computers maintaining the ledger, this restricts anyone from manipulating the ledger as not all computers can be falsely updated.
Let’s have a look at the pros and cons of digital currency, which is the main goal of this blog
Pros of Digital currency
- Digital currency allows instant transfer of payments to any place in the world and that too with zero transfer fee.
- Digital currency is not controlled by any single government, bank or person. in other words it’s not in the hands of any single person.
- It’s a secure way to transfer money. Digital currency works on the principle of a public/private key. The only way someone can gain access to your money is by having access to your private key. Your digital currency is safe as long as your private key is in safe hands.
Cons of Digital currency
There is no concept of personal identification in digital currency, anyone who has the private key is the owner of digital currency.
This anonymous nature of digital currency is helping terrorists and criminals to carry out their activities on the internet.
For instance, wanna cry ransomware encrypts all data on your computer and can only be decrypted by the key which hacker gives you after you pay him Bitcoin.
Also, Check What is Bitcoin – Explained by Technical Ustad