Cryptocurrency is a digital asset, a digital or virtual currency that uses cryptography to secure its transactions, control the creation of additional units and verify transfers.
First described in the late 1990s, cryptocurrency captured the public imagination when Bitcoin was launched in January 2009 by pseudonymous developer Satoshi Nakamoto as a “peer to peer electronic cash system”. Its success over the years has spawned hundreds of competing cryptocurrencies.
A key feature and arguably one of the key advantages of cryptocurrencies, are their organic, decentralized nature: Lacking a central authority or seρver, they are theoretically immune to government interference or manipulation. This means that transfers between parties are easier, cheaper and potentially more secure than traditional banking platforms. Some of the drawbacks of cryptocurrencies are their widely fluctuating exchange rates and their potential vulnerability to major system crashes and hacking attacks.
In less than a decade since its launch, Bitcoin has been subject to numerous thefts, including a number of thefts upwards of $60 million each in 2017 alone.
Having long appealed to niche users because of their anonymity and lack of government control, cryptocurrencies are quickly growing in popularity, specially following Bitcoin’s unprecedented growth in value during 2017: According to Markets Insider (at BusinessInsider.com), Bitcoin opened at $967.33 on January 1, 2017and closed at $ 13,955.23 on December 31 of the same year. Unsurprisingly, both online exchanges and physical cash points are becoming more common, and increasingly more businesses are beginning to accept payment in major cryptocurrencies such as Bitcoin.
Of course, with growing hype and popularity comes increased government interest – including, ironically, plans for government – backed cryptocurrencies.
For now, the future of cryptocurrencies remains uncertain. But with developments in this new area of technology happening every second, 2018 is set to be a rollercoaster ride that could see mainstream understandings of currency as we know it change forever.
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