What are crypto currencies - what are they for
Crypto currencies - with a vision to success
Crypto currencies came to light especially in 2017, after the price of bitcoin in particular jumped and induced various people to participate in this business. Within a few days, news appeared about investors who had become rich almost overnight. At the same time, the crypto currencies have fallen into disrepute after a subsequent huge drop in prices and are currently serving more as a gambling facility than serious consideration can be given to investing in them.
What distinguishes crypto currencies from the euro or similar currencies?
Supply and demand have always controlled all currencies that exist. However, the euro, the dollar and the yen, for example, also adhere to global market developments. Thus, the value of currencies is influenced by global trade and any economic impressions in general. This is a big difference to the crypto currencies. According to this, these currencies only get their value by the fact that someone wants to own a part of it. At the same time, crypto currencies are increasingly coming into circulation because they are generated virtually in the system.
Finally, the principle of supply and demand becomes clear. However, all crypto currencies would lose their value as soon as demand would no longer be met to this extent. There is therefore no additional hedging of the value.
Furthermore, the Litecoin or the Ripple, for example, are only available virtually. As a result, all transactions take place via the so-called "block chain", which makes the crypto currencies what they are.
What is the "Blockchain"?
The blockchain is a coherent system of various interfaces of a virtual crypto currency. The information, which is continuously generated and then stored, is stored in encrypted form in each interface. Although it is possible to see what information has been transmitted, for example what a transaction can represent, the signal cannot be traced back. This principle creates absolute anonymity within the blockchain, which is why crypto currencies have been used by criminals in the "Dark Web" for some time before they enjoyed such popularity.
At the same time, the block chain ensures that no fraud can take place. For example, if a hacker tries to illegally generate Bitcoin Cash, the block chain would sound the alarm. As a result, information is created at an interface that is not recognized by the other interfaces. As a result, the attempt to cheat fails. Only transactions can be generated that are aligned between two sides, for example, buyer and seller. This process can be carried out manually or automatically via "Smart Contracts", the latter not being applicable for all crypto currencies.
What is the intention to establish a crypto currency?
In addition to the creation of absolute anonymity in transactions and the exclusion of fraud, the main focus of all crypto currencies is the elimination of a third instance. Usually for many imaginable transactions, an instance is needed that mediates between buyer and seller and creates the possibility to execute the transaction. Especially banks take over this task in today's world, which has hardly been questioned for a long time, since there was simply no conceivable alternative.
Crypto currencies such as Litecoin, Ripple or Bitcoin use the respective blockchain to create the possibility of not requiring a third instance for any transactions. All types of transactions can be processed directly from point A to point B and do not require an instance to pave the way for these transactions. This is one of the main intentions of the creators and supporters of the crypto currencies.
A world that does not need a third party, in which fraud is excluded and which enables absolute anonymity in all kinds of business is the goal for many enthusiasts of the crypto world.
What are the possible consequences?
Transactions that take place without a third instance would have immense consequences for various areas of our daily lives. According to this, various professions, for example, would no longer be needed. Many qualified workers would suddenly be unemployed because their jobs would no longer be used. At the same time, the profession of programmer would become much more important, since the systems behind the crypto currencies are constantly being developed further and thus more personnel would be needed in this sector as soon as crypto currencies were to be established worldwide.
In addition, the debate on climate change would be rekindled, due to the enormous pollutant emissions caused by the electricity consumption of "mining". Already today, for example, the electricity consumption of bitcoin mining exceeds that of various nations, including Ireland and Croatia. It should be noted that this trend is rising sharply for all crypto currencies. With the extensive establishment of crypto currencies, an animated dialogue would develop, whereby on the one hand there would be those who are committed to the environment and on the other hand those who want to fulfil their vision.
Finally, various consequences can be conceived and concretized. It is independent, for example, whether Bitcoin Cash rises to the forerunner of the crypto currencies. Ultimately, the basic idea and the intention are similar for all crypto currencies. With the help of such currencies, the world population could increasingly protect itself against fraud, preserve anonymity and make a third instance superfluous.