The global market is buzzing with the word Cryptocurrency and everyone wants to make the most out of this digital gold rush. And why not, after the total value of these digital currencies has reached $3 trillion (November 2021) in a period spanning just above a decade. In fact, if we talk about the recent turn of events, these digital assets have quadrupled from what they were at the end of 2020 to the end of 2021. This shows how outstanding cryptocurrency can be as an investment avenue.
And the story does not end there because they are also one of the safest assets, thanks to the almost infallible technology of Blockchain. The strong protective shield offered by this underlying technology makes cryptocurrency hack-proof unlike its counterpart, the fiat currencies.
So in this blog, we will discuss the amazing asset that cryptocurrencies are, blockchain technology, and how they together offer the best of the possibilities in the coming future.
What is a Cryptocurrency?
Cryptocurrency is a digital currency that uses blockchain technology for secure transactions. They don’t have a central issuing or regulating authority like a central bank or government agency thus they are completely immune to the government or other regulatory interference. This is because, in place of the traditional system where the currency was issued by a central authority, it uses a decentralized system where multiple members of the network participate in the process of monetary unit creation.
To talk about its safety, then cryptography offers two-pronged edges. On one hand, it administers the production and prevents counterfeiting and, on the other, it authenticates the transactions and prevents double-spending of the same currency.
In order to deal with these digital assets, a person first needs a digital wallet to store them before they can spend it in the way they want. This payment system is completely digital and doesn’t rely on any governing agency, or a third party like banks to verify the same. It is basically a peer-to-peer system that facilitates transactions from anyone to anyone anywhere without involving a third party.
Further, these digital transactions are entered into an online database that is recorded in a public ledger known as the blockchain.
To have cryptocurrencies of your own you either have to mine them or purchase them from cryptocurrency exchanges. One should be aware that not all eCommerce sites deal in cryptocurrencies and their use, as of now, is highly limited. They are more popular in the Metaverse, a digital immersive world that combines, virtual reality, augmented reality etc to and offers a life-like experience. However, given the abrupt and rapid rise in the value of cryptocurrencies, they are garnering very high popularity as trading instruments.
What does Crypto and Blockchain Technology doing in the scene?
The word “Crypto” refers to the various encryption algorithms and cryptographic techniques that protect these entries in the public ledger. This includes the techniques like public-private key pairs, elliptical curve encryption, and hashing functions. As we discussed above, this prevents counterfeiting and double-spending.
And at the core of this setup is blockchain technology. Blockchain is a chain of blocks wherein the data is stored. The data can be of a maximum 1Mb storage capacity. In the context of cryptocurrencies, the block store the details of transactions such as to send’s details, receivers details, amount of transactions etc. Other than that, the block also stores other things that come in handy for ensuring the security of the database. These are the hash, previous hash, block number, nonce.
A hash in the identification mark of a block that is completely unique. The value of hash depends upon the values stored in the block such as the data, block number, previous hash etc While other values are fixed and unchangeable, the value of nonce is manipulated in order to reach a value of a hash that is acceptable to the system. Thus, a nonce is the only changeable part of the block.
Further, the previous hash is the hash value of the preceding block. This is what forms the chain of the blocks as every successive block stores the hash of the previous block.
You can understand the working of blockchain as a global spreadsheet or ledger that is managed by the public instead of a central authority. Thus, it is a decentralised system which means that anyone can view it, analyse it as well as audit it. It allows a person to safely send money to another person without going through a bank or financial services provider.
The decentralisation is ensured by making it a distributed ledger. To achieve this the database is stored on multiple volunteer members, or say locations, of the network independently and not just with the selected few tech giants as we see these days.
Moreover, to balance the public and private aspects of the technology, blockchain uses public and private keys for virtual security. The public and private keys together make a key pair. The user can share their public key to receive cryptocurrency, however, the private key must be kept secret. As the holder of the private key would be able to access your stash of cryptocurrency whether it is you, your family member or any other person.
Blockchain is certainly more reliable than the existing databases. This is one of the key factors that make cryptocurrency reliable and popular. And with each passing day, the popularity will only increase.
New Crypto for a Better Cause
The OAH Family, an organization striving hard to help elderlies launched its own cryptocurrency named OAH coins. The crypto will be used to help elderlies in areas like healthcare, age-care, livelihood, disaster-response and awareness. It is one of the cryptocurrencies that have a promising future with a high return on investment. However, the best return is the emotional satisfaction that you get once you invest in these coins. This satisfaction is of helping the disadvantaged is way more fulfilling than the monetary gain that is already very high. Thus, investing in OAH Coins is highly recommended given that the chances that it will offer returns are guaranteed whether monetary, emotionally or both. And it would be a move that you will never regret.