Technology has changed how people work, interact, shop, and even pay for things. Companies and customers no longer always prefer cash, and this behavior is giving way to contactless payment methods such as Apple Pay. Consumers can pay for goods at digital registers with a quick wave of a smartphone. Now, new payment methods are emerging. The two terms that are gaining popularity today are cryptocurrency and blockchain. Let’s dive in deep to discover these terms and how they relate.  

What is Cryptocurrency?

By now, almost everyone has heard of Bitcoin. It was the first cryptocurrency to gain universal attention, but others are gaining traction. There are nearly 2,000 types of cryptocurrencies, with new ones being created daily. Cryptocurrency is a type of electronic money. There are no physical coins or bills; everything is done online, like an e-wallet. Transferring cryptocurrency to someone online without using a third party is possible. Many people purchase cryptocurrencies as a form of investment.  They wait until the price for that particular currency goes up, and then they can instantly sell that online to anyone or any website. Cryptocurrency can be purchased using a credit or debit card or through a process known as “mining.” The money is then saved in a digital wallet on your computer or other devices.

Cryptocurrency got its name because it uses encryption to verify transactions. Storing and transferring Bitcoin data between wallets and public ledgers requires sophisticated code. The encryption’s goal is to provide security and safety.

How is Cryptocurrency different from any other currency?

Cryptocurrency is independent money. Cryptocurrency accounts, unlike bank accounts, are not secured by the government. Suppose you store cryptocurrencies with a third-party company, and that company goes out of business or gets hacked. In that case, the government is under no responsibility to help you in recovering your funds. The value of a cryptocurrency changes all the time. A cryptocurrency’s value might vary wildly in an hour—various factors, including supply and demand, influence this. A $1,000 investment now could only be worth a few hundred dollars tomorrow. And there’s no assurance that if the value drops, it will increase again.

How Secure Is Cryptocurrency?

While security measures are in place, this does not mean cryptocurrencies are immune to hackers. Some high-profile thefts have caused chaos in bitcoin businesses, like Crypto-jacking when a hacker utilizes your computer or smartphone’s processing power to “mine” cryptocurrency without your permission. Hackers can infect your device with harmful code simply by visiting a website. 

There is one technology that can help you with security thefts, known as Blockchain technology. Although blockchain mechanisms are highly complicated, the basic concept is simple: decentralize data storage so that it cannot be owned, controlled, or manipulated by a singular body.

Blockchain technology can transform how people think about ownership, privacy, uncertainty, and collaboration in the digital world, disrupting industries and practices as diverse as financial markets, content distribution, supply chain management, humanitarian aid distribution, and even general election voting.

What is Blockchain & How Does it Relate to Cryptocurrency?

Blockchain is a database that holds encrypted data blocks and connects them to create a single chronological source of truth for the data. Instead of being copied or transferred, digital assets are distributed, producing an immutable investment record.  The support is decentralized, giving the public open access in real-time and transparency. The integrity of the documents is preserved by a transparent form of changes, which builds trust in the asset. The inherent security features of blockchain, as well as it is a public ledger, make it an ideal technology for practically every industry. Blockchain technology is commonly used to create cryptocurrencies. Unlike cash, crypto relies on blockchain as a public ledger and a more robust cryptographic security mechanism, ensuring that online transactions are permanently recorded and protected. Here are some of the primary reasons why cryptocurrencies are quickly gaining popularity:

• The security of blockchain makes theft far more complex since each bitcoin has an absolute identification number tied to one owner.
• The need for individualized currencies and central banks is reduced by crypto. With blockchain, crypto can be delivered to anybody, anywhere in the world, without currency conversion or central bank intervention.
• The idea of a blockchain-based digital currency for payments is gaining traction among major companies. Tesla notably stated in February 2021 that it would invest $1.5 billion in Bitcoin and use it as payment for its automobiles.

Conclusion

At the age of twenty-seven, blockchain finally earned its reputation, with many practical applications for the technology already being implemented and explored, to bitcoin and cryptocurrency. Blockchain stands to make business and government operations more accurate, efficient, secure, and cheap with fewer brokers.