What is cryptocurrency? Cryptocurrency is a “digital currency” that uses advanced encryption techology to facilitate free and secure peer to peer transactions.
Most cryptocurrencies are fiat currencies by nature, meaning they have no physical valued tied to them. Cryptocurrencies are also usually not controlled by any government or country. The value of a cryptocurrency is solely determined by supply and demand as traders buy and sell the currency on the public traded exchanges.
“Cryptocurrency gives you ultimate control over when and how you use your money!”
So what makes cryptocurrency so different than the money yo usually spend online via credit and debit cards? There are a few key differences to be aware of:
- There is no central bank that determines it’s value or controls the flow of new money being created. So there is no manipulation of the amount of money in existence by an institution such as we are used to with the U.S. Dollar. The US Dollar is controlled by the Federal Reserve, but cryptocurrencies like Bitcoin, are controlled to produce an amount of coins limited by an algorithm that no single person, company or country or other type of interest can change.
- The value of a cryptocurrency is determined by the market (whatever people are willing to pay for it). Countries are not involved, so the welfare of your nation’s economy will not affect the value of your cryptocurrency. The value of a true cryptocurrency is based solely on supply and demand and functions much like a commodity on the stock market.
- Cryptocurrencies have the lowest fees to transfer money anywhere in the world. The fee is not affected by distance, country borders or any other of the usual factors. This makes it very easy whether your objective is to transfer enormous sums of money globally or to conduct micro transactions with someone on the other side of the planet.
The Advantages Of Cryptocurrency
People love cryptocurrency because it offers an easy way to transfer money globally and provides privacy for making transactions. For example, cryptocurrency can’t be traced like a credit card or a bank account can be to a specific transaction. At the same rate all Bitcoin transactions can be forever traced to the specific “alias” or wallet key that performed it.
This makes for a lot of discussion about whether Bitcoin is either untraceable or 100 percent traceable. Obviously if it can’t be traced, it has an immediate appeal for the black market and even though media often only reports on cryptocurrencies as something only used by criminals to buy drugs on websites like “Silk Rods”… the truth is that most people who use cryptocurrency are just regular everyday people like you and me.
People like to talk about cryptocurrency because it is making it possible to maintain some privacy in a world where someone is always looking over your shoulders whether it’s the government, an Internet service provider, or data mongering corporations. Cryptocurrencies such as Capricoin, Darkcoin, Blackcoin or Zerocoin are constantly trying to increase the privacy of the individual.
A new cryptocurrency called Capricoin has a more advanced system of encryption than Bitcoin that also acts as a payments platform so that transactions are 100% secure at the same time as recorded in a public ledger so as to work alongside the fiat currencies of the world, and not against them (meaning Capricoin has been designed to be government friendly and withstand future government regulations that will be imposed on cryptocurrency.)
So while Bitcoin started it all, in the free market there will always be competition that will learn from the mistakes of it’s competitors, in order to better serve the consumers. What you are seeing with Capricoin is surely the first of many cryptocurrencies that will bring innovation and a better designed mousetrap to market. And as the market continues to evolve we will continue to answer the question: What is cryptocurrency?
It’s The Future Of Money
So whether you want to use it in everyday commerce, or purchase it for it’s potential increase in value and make some serious gains…how do you get into the world of cryptocurrency? There are plenty of ways to get started, whether you are going to trade on the exchange or get into mining your own coins.
At Cryptocurrency Answers we are going to provide you with information, news and education about the $87 Trillion per year crytocurrency megatrend!