In a world of state control and vigilance, people are becoming agonizingly paranoid over what and when things are being watched over. However, a parallel universe has fast been growing which gives users a different experience with a decentralized, non-state regulated and universal currency.
Yes, we do understand you aren’t getting what we are talking about.
In fact, have you heard of the word ‘cryptocurrency’? Sounds fancy, but it may not be. Here is something you might have heard about – bitcoin cryptocurrency (unless you were under a rock for the past 8 years!).
Now that things are picking up, you obviously don’t want to be left behind, right? You want to know what it is and how it functions.
Well, once you finish reading this blog, the basics of understanding the concepts will be in the back of your hand.
Finally, let’s come to the topic and quit beating around the bush.
Here’show cryptocurrency works…
Imagine you want to buy something, or make a transaction, but you don’t like the hassle of all the gateways and passwords and all the other stuff regular banks make you do. That is exactly what cryptocurrency is for.
It doesn’t certainly exist in real life, though!!
What happens is, this currency works strictly on a transaction basis. The more people use it, the more money is created. And yes, you can’t even attempt to double spend.
A completely decentralized database is always at work. This means, everybody using the system can view it; unlike regular bank accounts, it is only available to the user. So, how is that great?
As users use bitcoin with pseudo names, it isn’t exactly a violation of their privacy. Plus, they get to know the details of every transaction in one location.
Here’s a case study:
If ‘A’ wants to make a transaction with ‘B’, he will have to request a transaction. At this point, A’s request will be broadcast in nodes (computers) that will then use mathematical assistance to check the validity of the said request. Questions like –
“Does A have money to send B?
Has A already used his available currency before?” will be answered.
Once verification is complete, the request will be processed and the data will be added to the decentralized universal balance sheet, also known as the block chain. The addition of a new block to the chain is pretty much etched in stone. No more changing, and finally the transaction is complete.
Now, who is in charge of keeping things in line or ‘adding blocks to chains’?
People called miners. They are the missing puzzle piece to your question of how cryptocurrency works.
These miners invest in hardware and offer their services to companies for helping them add blocks to the blockchain. In return, companies give them a few coins. But, why is adding blocks so important?
The transactor’s cryptographic key locks a trade once added to the blockchain. This currency is considered so transparent because once a transaction is confirmed and a block is added, there can be no alterations.
So, bitcoin cryptocurrency will keep increasing as more people use it. This literally translates to the more you spend, the more there is.
Is it something that geeks are just going nuts about, or is there a game changer here?
This form of currency could very well be the future.
Remember how we talk about an ideal state in political theory classes where the state doesn’t interfere at all with the private lives of the citizen?
Cryptocurrency takes away the state’s most potent weapon, Money! It only takes disintegration of power to another level.
Users can always access the balance sheet at any time. Dueto the balance sheet’s freedom from laws and regulations, the addition of blocks to the chain is invulnerable to change.
Economists believe that only 8% of the world’s total cash is physically available. Everything else is just a blip on the bank’s computer screen.
Hugely regulated by governments, normal cash is as virtual as bitcoin.
All of us have bought things online or purchased things with our credit cards. What happens every time we make a purchase request? A gateway guards us against spending our own money.
Before your transaction is complete, you must fill formalities, ids, pins, passwords, and what not, to keep things going.
When you know how cryptocurrency works, all this vanishes. It makes money transfer incredibly fast and doesn’t charge any additional transaction fee.
Also, you don’t need an international card or a PayPal account to start. Simply download the free application on your phone to start sending and receiving money.
Interestingly, cryptocurrency does not depend on regular banking systems to work.
Cash flowing around the world is nothing but the debt the state owes the individual. It is a constant debt cycle going from one person to another. This is primarily why money needs reserves.
Debts and reserves are not a part of the virtual cryptocurrency. That signifies you won’t be seeing sudden charges made to your bank account on some hocus pocus.
Also, like bitcoin, others too schedule their coin issuing process. The supply isn’t unlimited, and that is why, with more use, stakes go higher.
Last but not the least, nobody regulates or incurs taxes on cryptocurrencies. It’s your own money and you can give it to whoever you like or buy whatever you want.
Understanding how cryptocurrency works turned out pretty great, didn’t it?
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Looking for the solution where you can build your own Bitcoin Exchange Wallet? This is for you.. Read on..
There is this thing people keep hearing about, and not a lot of us know. Words like bitcoin, cryptocurrency, digital cash, etc. are thrown around the internet all the time. So is this one –Bitcoin wallet.
Sounds pretty simple, right? Well, it is and it isn’t!
The purpose of bitcoins is to create a peer to peer transaction system that would bypass the regulations of the state.
However, before we move into understanding how to make a wallet, let’s get a few basics.
Since bitcoins are a decentralized monetary system, their balance sheet is enabled to every user. This sheet is also known as the blockchain. Every time a successful transaction takes place, a block is added to the chain and mind you, these blocks are incorrigible.
For bitcoins to become mainstream, it has to take certain steps.
Firstly, the mining network uses hardware support to mine coins and add blocks to chains.
The next part is the wallet system. There could be a number of reasons for opening a cryptocurrency wallet.
It could be an exchange forum for virtual money and fiat money (real cash). In this case, the company needs to have significant capital to enable bitcoin users get either one for the other.
In the second scenario, bitcoin wallet companies can also be established to store the user’s cryptocurrency. This needs a specific set of requirements like high security to protect the cryptocurrency balance of users.
Even entrepreneurs can also use wallets to set up their trading company. Since many big companies are very rapidly accepting bitcoin, there is a huge chance of growth in this sector. Also, there are no technological merit requirements to make it happen.
You can hire IT solutions companies to make you a secure set up for starting your own wallet station today.
Now, addressing the elephant in the room.
Most countries have still not taken any sides when it comes to Cryptocurrencies, so legally, it’s still pretty fresh. However, it would be wise for you to check state regulations before you get into making cryptocurrency bitcoin wallet.
A good initial start would be to look for like-minded people who use bitcoin. This way, you get an instant upper hand vision into the market. There are various bitcoin forums all over the internet to look for.
For a good kick start, design your wallet for your clients. Opt for multiple payment options like PayPal, electronic wallets, and credit/debit cards. Always keep auditing, accounting, and risk management systems handy for better client service in tough times.
In fact, meeting with the cryptocurrency security standard is paramount and often looked over by many wallet providers.
What you need to understand while handling a wallet is that these people are mostly tech-savvy. They are used to a good experience when it comes to web interaction. Also, in a way, you as their service provider must make them feel secure so that they come back to you again and again.
To ensure this, you could incorporate a few things.
The premium bitcoin wallet experience
Brand creation is a very important part of any entrepreneurial venture. A lot of activity on social media and web brand marketing could go a long way to making you a trustworthy cryptocurrency service provider.
Owing to the virgin condition of the market, this is definitely something you should be looking at.
Also, if you were the client, your security would be the highest concern. Keeping that in mind, you should enact anti-money laundering solutions and use dual authentication for users.
Another important step would be to ensure that you have necessary client details when it comes to fiat money transactions. The legal problems in such cases could be very challenging and can ruin your venture and its reputation.
A real struggle will be adding banking services to your wallet. Ask why?
Well, a lot of banks still don’t buy into the cryptocurrency wallet business and consider them as competition. However, to be a user-friendly and complete wallet, this is extremely essential.
However, the good news is, many banks are looking to adapt to this change positively.
Hence, you must opt for like-minded ones as partner co-operation is pivotal to the success of such ventures.
Now, coming to the legal part of the enterprise
You should first decide whether you are looking to create a global service or a local brand. Starting out small definitely helps in building trust and authority in any given field.
Consult your legal options and make sure that you have the right whitepaper for the job. In many cases, like in the USA, the Internal Revenue Service has tried to regulate bitcoin wallet providers like Coinbase.
Are you thinking “this must be it?”
We still have a few miles to go. What about keeping all the sensitive data secure?
Opt for managed service providers and get IT solutions including data backup in data centres and clouds for maximum security. Remember, being a bitcoin wallet service provider is always a huge responsibility, no matter how futuristic it sounds.
Once you’ve taken all these things into account, you are pretty much ready.
If you are looking for some professional help, Aglowid IT Solutions can be your service provider. They specialize in integrating latest technologies and modern approaches for catering to their client’s requirements. Drop your message at email@example.com today for any query you have.
Talk about your requirements and clarify directly with the experts.