Crypto currency is a medium of exchange that provides secure transactions as well as a very robust system of recording and verifying those transactions.
There are many different types of crypto currency, Bitcoin and Litecoin are just too examples. Almost all of these crypto currencies share several common factors. One of the most common factors is the decentralised means of recording transactions. This is done using a public lecture more commonly known as the block chain.
The block chain is what makes crypto currencies so beneficial, it also makes them very different to traditional means of carrying out and verifying transactions. The block chain is managed by a distributed network of computers, in fact anyone can contribute towards this management. Transactions that are recorded in the block chain of verified by the computers in this distributed network and it is a race to verify each transaction that makes it all but impossible to falsify any transaction when it comes to crypto currencies.
Crypto currencies are still very much in their infancy, whilst Bitcoin has been in the public eye for some time it is still looked at with some suspicion as our crypto currencies in general. Many people and bodies will argue that crypto currencies are not that different to traditional monetary systems, and also that the parts that are missing from crypto currencies are actually what makes existing currencies work best. For example many people would say that not having a bank or other central point of management underpinning the currency causes a big problem in terms of stability.
Whilst there are many questions about crypto currencies, how secure they are, how they can be best regulated and how stable they are, there is no doubt that they do represent the future of transaction processing.
Whilst traditional banking systems may work well at the moment with the advent of so many new technologies that rely on fast, cheap and scalable transaction mechanisms and new form of processing payments is critical to the development of these new systems.
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The Internet of things is a great example of where no form of payment processing May be required. It is estimated that there are around 1.5 trillion things that could be connected to the Internet globally in the coming years. This estimate is likely to be very conservative. As we connect more and more things to the Internet the way that we pay for using different services will likely change, payments will be made on a far more granular basis, and on a much more frequent basis. This will require a method of payment processing that is much more secure, faster and more robust than current systems would allow.
My prediction is that we have only just seen the surface of what crypto currencies have to offer, and they will likely become one of the key facilitators for almost all of the emerging technologies of today.