Crypto is a popular financial concept recently . 2017 is an explosion with digital money era, you can hear the word “bitcoin” at almost everywhere, virtual currency spike.
– Why so many people search for it on the Internet ?
– Are there any stories about BTC ?
– Who created BTC ?
– Why is it so powerful ?
What is crypto?
Algorithms are known as digital money, or in some countries in the world people have the habit of calling it virtual currency, which is cryptocurrency, you can call it whatever you want . This is a digital currency coded by algorithms such as SHA – 256, used to exchange and purchase goods and services like currencies in circulation in the world such as USD, EUR. or VND.
However, this algorithm was created for the purpose of exchanging digital information through a complex coding process. This coding is used to ensure that transactions are made and control the creation of a new currency. The first codename to be created was Bitcoin (BTC) in 2008. Up to now, with the explosion of the 4.0 era there have been more than 1300 types of mathematical algorithms. In addition to Bitcoin, all other codecs are referred to as Altcoin.
THE FORMATION OF DIGITAL MONEY
THE HISTORY ABOUT THE DEVELOPMENT OF MONEY.
To understand the formation of crypto, let’s first look at the most basic information about money.
At the beginning of the slave-possession period, people have devised ways of exchanging equal things. When reached a higher level, they know how to use intermediaries such as clamshells, and later metals, gold, silver, etc. However, gold and silver are rare and expensive, difficult to split up to trade. . For about 100 years, government issued paper appeared to overcome the difficulties before.
Paper money is convenient because it is compact and can easily print different denominations but is also easy for people to replicate it .Because it is easy to print and because of poor human management, a concept of price devaluation, called currency devaluation, is called Inflation.
And then modern technology also contributes to the development of currency. The storage and use of cash in large transactions are very inconvenient, so people use bank cards to save and pay. However, this type still faces some procedural barriers about procedure or fee,so the next step of developing the money has appeared, and that’s crypto.
THE FORMATION AND DEVELOPMENT OF DIGITAL MONEY
With the breakthrough of revolutionary 4.0 innovations such as artificial intelligence, virtual reality technology, enhanced realism, Blockchain’s algorithmic algorithm has been invented. with the first appearance of Bitcoin in 2008 by Japanese-American Satoshi Nakamoto. But it was not until the end of 2009 that the virtual currency was recognized as having a realistic value when The New Liberty Standard offered a real conversion value of US $ 1, equivalent to 1,309 BTC.
May 21, 2010: Bitcoin’s first transaction was made when Laszalo Hanyecz, a programmer living in Florida, sent 10,000 BTC volunteers to buy him a box of pizza.
August 2010: For the first time Bitcoin market was “visited” by hackers, 184 billion Bitcoin appeared unexpectedly that the value of this currency when converted into USD fell to only a few cents.
January 2011: The Silk Road – a drug market for Bitcoin to trade. This has dragged DEA together with Interpol to make the Bitcoin image worse .
2012: Microsoft accepts this currency as a way to pay for games, applications, and other digital programs from Windows, Windows Phone, Xbox, Xbox 360, or Xbox music.
2014: Dell, Paypal accept payment by Bitcoin.
2015: The US recognizes Bitcoin as a product; the European Union ruled not to levy Bitcoin transactions. The bitcoin withdrawal plants sprout all over the world.
March 2016: 40 major banks in the world have tested Bitcoin trading.
Dec. 2014: More than 1300 types of digital money have been released, Bitcoin prices reached a record highs reached $ 20,000 on 17/12/2017.
After the success of Bitcoin, by the end of 2010, there were more than a dozen of tailored crypto, including Litecoin (LTC), which was considered a new replacement for Bitcoin. So far, thousands of different types of coding have emerged, marking a turning point in the history of world finance: the era of mathematical algorithms. There are now more than 1300 officially free digital money exchanges in the world. Although there are many types, Bitcoin is the most used because it offers the most flexible liquidity in all. By the year 2017, Ethereum (ETH) is considered as the second potential Bitcoin in the world with a growth rate of 400 times.
ADVANTAGES
Restricting inflation and devaluation: Most cryptos are limited, as the source code has already set out how many units will be released from the beginning. Bitcoin, for example, has only 21 million VND. Unlike paper money, it will restrict inflation and devaluation.
Not being controlled by the government or any organization: Money is a currency that is out of control of the government, banks or financial institutions. The government can not freeze an account of an individual or a business.
Exchange cost saving: Spending scams, nefarious activities will not be possible. Intermediary payment processing also eliminates significant transaction costs. The transfer of foreign currency will also no longer take time and expensive with this type of money. Users can only need a smartphone to transfer money abroad at a fee inland without having to wait for a foreign transaction confirmation of up to 15%.
DISADVANTAGES
Because crypto is not being controlled by the government, it means that it’s also a place to create conditions for the black market to operate illegally. In addition, this currency is considered to be very good security encryption and very difficult to be stolen, however, without the knowledge of security will be more risky. Hackers can take advantage of network risks to gain ownership of money transfers.
Another problem of digital money is that they have a fairly large price movement, depending on who is able to control the supply. The price of coin can be pushed up so high and then fall down miserably, causing many hands to go blank.
CRYPTO IS GONNA REPLACE PAPER MONEY ?
Today, the money we use the most is paper money because they has many advantages, but also the defects should be overcome such as easy to cause inflation, devaluation, inconvenience in transactions, storage. People are not only interested in the amount of money that they care about is the value of money. But when paper money is dominated by government, it is difficult to completely stop the price drop of money.
Unlike the banking system of the government that controls the value of their money through the domestic money-printing process, pre-accounting is a hierarchy of management systems, its supply and value are managed. by the user. Most cryptographic protocols are designed to avoid generating additional cash flows over time, unlike government paper money that can always print and generate more money, thus avoiding inflation. and devaluation. Bitcoin, for example, will only reach the limit of 21 million coin, which will never appear the 21 million and one coin. While hundreds of cryptos exist, all of them are maintained by one community of operators and transactions.
Crypto has so many advantages than the paper money we are using. And the fact is, no matter what anyone tries to stop,in the end,the one with more advantageous will win. In general, no man or government can prevent the development of powerful digital money . In the future, this currency is expected to dominate the world monetary market.
So, digital currency is a nessecary stage in the process of social development. In the future, when the current shortcomings are overcome, the money promises to be the arrow that leads us to a society without cash.