Cryptocurrency – An improved digital payment system

Well, the time hasn’t reached to the point that credit or debit card transactions are considered outdated but science always makes an attempt to improvise so that the end users get maximum benefits. Cryptocurrecy is one of such inventions being initiated first by an anonymous developer popularly known by the name Satoshi Nakamoto (Bitcoin) in the year 2008 and then followed by many with better versions and functionality, making sure that the core concept remains intact. One must learn its key concepts, motives, and advantages before looking forward to using it.

crypto-currency

Cryptocurrency is a method of peer to peer digital transaction in which the money directly goes from source to destination without any interference in between like international boundaries, bank that permits, payment institution that enables the transaction, etc. This costs (in case of Debit/Credit card transaction) certain amount of bucks while one makes a payment (other than the products’ original cost). Cryptocurrency either absolutely does not have any processing fees or little as negligible. Cryptocurrency is very fast in accomplishing the payment and does not have interruptions like frozen account as a result of any fraudulent activity. The list of end users using this technique are entirely anonymous, despite showing every minor activity in the public ledger that ensures transparency; thus minimizing the chances of hackers breach into the system to a very great extent. Nobody can change the magnitude of digital coins since this change will reflect all the later transactions being made and all the users in the distributed system will find out the difference between the last transaction and the latest one.

cryptocurrency

The method uses an alphanumeric address anonymously that gets changed with every new transaction. Also, this method doesn’t need any physical card to swipe but just any mobile device that enables internet connectivity. Using Quick Response (QR) codes the payment is possible. The electronic wallet could be stored in any computer, cloud or smartphone. If a person sends or receives the digital coins and goes offline for days or even months, (s)he may get the update of the ledger soon as he/she again goes online.

Bitcoins, which are based on this very principle Cryptocurrency, aren’t precisely termed as currency units like Rupees, Dollar or Euro but just a magnitude that is generated (or ‘mined’) by solving the complex mathematical problems in a distributed network system. Solving the problem rewards the ‘miner’ (who solves it first) with 50 Bitcoins and this keeps on decreasing every time to half of the previous.

bitcoins

If someone has some bitcoins (s)he also has a private cryptography key which is connected with an internet address. This address contains the balance that one could see and make payments accordingly. If A wants to send bitcoins to B, A needs to have B’s address to make it possible as well as A’s own address, along with that private cryptography key of his own to send across. The distributed network as a whole verifies the transaction by continuously monitoring it with an intention to ensure that not a single bitcoin is sent to more than one place simultaneously.

Despite of operating entirely in a public view it never reveals anyone’s identification. The ledger stores every single transaction being made by an individual through keeping a trail of ‘Blockchain‘. The public view of the ledger shows just the transaction made and the ID associated with respective individuals. One doesn’t need to enter other information such as email, contact number, name, postal address, etc.

You may pay online through this technique if the website(s) has accepted the payment via Bitcoins or any other similar version of Cryptocurrency. The payment could be done for any kind of products or services, be it related to ordering a pizza or bus ticket booking. Currently, it has just started and so most websites haven’t given it the green signal but the coming years will. Once done practically the method would be understood even better.

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