Are you bothered having a third party involved in your monetary transactions? Do you feel unsecured, thinking you could lose your funds anytime? If yes, why not try cryptocurrency?
Cryptocurrency is a digital currency based on a cryptographic system;
Cryptography is the discipline concerned with communication security, for example, confidentiality of messages, sender verification and non-repudiation of messages regardless of the medium used.
It is simply a digital framework built to serve as a medium of exchange and it uses strong communication security to protect financial transactions, control creation of additional units and verify transfer of assets.
Bitcoin was the first released open-source software in 2009 and it is generally considered the first decentralized cryptocurrency. Since the release of Bitcoin, cryptocurrency has greatly influenced mankind.
Here are the 5 features that make Cryptocurrency very secure
1. Decentralization
This is the characteristic of a system that protects it against the intervention of issuing agencies and government manipulations. This is made possible through a blockchain system (a shared record of transactions in a cryptocurrency network).
Cryptocurrency, unlike fiat money which is fixed by government edicts, is immune to government control. Since the invention of cryptocurrencies, has been almost impossible for hackers to illegally access the user’s account and steal the money
Also, outside authorities find it impossible to control or even close down the system. This simply means that funds cannot be stolen by a stranger. Funds are safe here since accounts are protected with an individual’s personal private key. This has helped in the protection of funds over the years and has ensured that services do not turn insolvent and thus preventing loss of funds.
2. Security
Cryptocurrencies are very secure. They are guarded by a security system known as cryptography. Literarily, this means that each block, ledger, and transactions are guarded by highly sophisticated encryption techniques.
This has been possible with the use of a specific key (your private key) or cipher. Also, once you send the cryptocurrency to a recipient, they can only receive it and deposit it into their account with the use of their own corresponding key or cipher.
More so, authentication has also been keeping accounts secure through verification. For example:
- Entity authentication: This verifies your identity
- Data Origin Authentication: This verifies that your message was sent by you.
Also, blockchain technology is used to store an online ledger of all transactions performed by users using any of the cryptocurrencies. Cryptocurrency is exposed to limited danger from hackers since the details of transactions are accessible on all computers that operate with the Blockchain software making a forgery of these transactions impossible
Most importantly, what characterizes the Bitcoin as a cryptocurrency is the inability to trace transactions back to a particular individual. Although the network has a general and unconstrained log of every transaction, the blockchain does not keep details of users’ individual information.
3. Privacy
With cryptocurrency, there is no room for a third party. This ensures that no human intervenes between the transaction parties, (that is, the payer and the payee).
details of every transaction are available on a public Blockchain which is easily accessible by government agencies, business partners or even co-workers, hence no one is interested in revealing their personal details.
This is why pseudo-anonymity is important. In cryptocurrencies, it is simply the lack of evidence to reveal the true identity or personal details of a user. It uses a ‘false’ name that is used to carry out transactions rather than the users’ real name. It is also necessary to note that on the Blockchain, the only important and apparent detail is the transaction fee, every other detail is concealed.
Also, since there is no involvement of a third party, users do not need to obtain permission from anyone to use cryptocurrency. Anyone is allowed to get the necessary software to transact with it. The transaction of a particular individual cannot be identified or reported to other entities, thus keeping users’ personal details private and free of threats.
4. Instantaneous
Cryptocurrency has helped a lot of people to transact within a twinkle of an eye. Unlike the credit card transactions which take a long time for users to enter card details and a longer time for verification processes, transactions with cryptocurrencies happen immediately.
They occur as soon as they are carried out. It doesn’t matter where you are. All you need is a computer, the necessary software, your account, and your private key and you are good to go. The transaction is done once the button is clicked on. Hence, cryptocurrency has helped in the speed of transactions, carrying out multiple transactions within a shorter period of time, thus, enabling commercial bodies to make more profit within a shorter time.
5. Low Transaction Fees
Small scale businesses have started using cryptocurrencies for transactions because of its lesser fees. These businesses now accept cryptocurrencies such as Bitcoin as a mode of exchange. For example, you can now pay for your hairdo with Bitcoins. This has rapidly enhanced the enlargement of the business scale since profit is now increased. The world’s economy is gradually taking a new turn towards cryptocurrency.
Conclusion
In a few years from now, cryptocurrencies will be greatly recognized as a means of exchange because of its many advantages. Unlike the fiat money which is accompanied with various risks and difficulties, cryptocurrencies are easier to use. With the advancement of Blockchain technology, the world’s economy holds a brighter future since it will definitely help to enhance the growth of economic resources.