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What You Should Know About Cryptocurrency

John May
What You Should Know About Cryptocurrency

 

So get ready for some light reading everyone. This isn't dense at all. Bullet points? Nah.

Tenacious? Good. Everyone has heard of bitcoin, some of you may have heard of ethereum, or litecoin. Now, if you have heard of ripple or Sia Coin, we salute you. You are informed. Whether you are new to cryptocurrency or watch the coin charts religiously, hopefully we can shed some light on the key points around one of the most discussed technologies today.

Blockchain - what is blockchain? It's a startup company that bullishly named themselves after the actual blockchain (we'll see how that goes). Saltiness aside, the blockchain is (well technically it's blockchains now) is a distributed database that is used for the maintenance of continuously expanding lists of records, called blocks. Crystal clear. No way to misunderstand that. 

In practice,  blockchains are historically resistant to tampering and modification, giving these records real value. Whether Satoshi Nakamoto (alias or not) knew what would grow from the blockchain paradigm  is anyone's guess. Satoshi will become one of the wealthiest inventors ever.  Blockchain is comprised of  data that has to be mined, and once mined, this data is now usable for various purposes. The reward for mining is, you guessed it, bitcoin, (or altcoins, but we'll get to that briefly). Because there is a finite blockchain(s) to be mined, there is a finite number of bitcoins and correspondingly, a finite number of altcoins (arguably). This helps give these currencies real value. It's similar to all currencies, they are representations of real valued goods. The US dollar was backed by gold and/or silver until 1971, when these federal reserve notes became essentially backed by credit. Your dollar is not backed by gold or silver, it is backed by "the full faith and credit of the government." This in practice has been very effective, with some exceptions - that's not the point of this article, anyway. 1 bitcoin is worth over $2000, at one point they were worth less than a penny. Imagine if you'd bought $100 of bitcoin back then and held on to them? We get sweaty palms. ew,

1 BITCOIN IS WORTH OVER $2000, AT ONE POINT THEY WERE WORTH LESS THAN A PENNY. IMAGINE IF YOU'D BOUGHT $100 OF BITCOIN BACK THEN AND HELD ON TO THEM? WE GET SWEATY PALMS. EW,

Blockchain holds even further value; it is distributed across a network. It is a database that expands across multiple devices. Think of the cloud - a series of interconnected computers that store data. Many experts see blockchain as the future of the cloud. Many other conservative experts call it too high risk to be sustainable. There is certainly immense volatility in the bitcoin market, but several coins, especially litecoin are showing surprising resilience to the volatility of bitcoin. Any cryptocurrency trader or investor can tell you that most altcoins follow the valuation trends of bitcoin, but that some ( as mentioned previously) are more resilient than others. Just like the real-world markets, current events and innovation determine a large portion of the value of cryptocurrencies. Access to bitcoin has been historically difficult, and when the ability to trade becomes limited due to whatever reason, there are often panics. Same as the stock market, if investors sense too high a risk, they'll panic sell. What of the more resilient altcoins, though?

Take Sia.tech for example. Sia is an altcoin that provides  measurable, visible value to laymen. Siacoin can be mined, but further than that, it can be used to purchase encrypted, distributed cloud storage that is magnitudes more affordable than anything else on the market. They are new to the world of cloud storage, but are already claiming to be "enterprise level" cloud storage. They have consistently proven the robustness of their coin and network, and it could become a serious threat to the likes of google or AWS. For example, A TB of data stored on Sia's cloud could often cost as little as a dollar and is totally untraceable and (arguably) incredibly secure. We won't go into the technical details, but it is a fascinating coin with a bright future. 

To wrap things up, bitcoin and altcoins have a bright, if slightly unpredictable future. As nations and their governments wise up to the existence of these new currencies, we will see attempts at legislation to manage them. The efficacy of this will be varied, as the sole purpose of these coins is to maintain anonymity and security of their users. Many people immediately think of the darknet or black market deals when approached about these currencies, but that is simply due to lack of exposure. Major financial institutions use ripple, bitcoin is used to in cyber security insurance, siacoin provides affordable, anonymous, and secure cloud storage for anyone. If there is a takeaway from this article, it's that cryptocurrencies should not be feared, but rather understood.

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About Simplicity

Simplicity VoIP, based in Richmond, VA, provides hosted PBX, VoIP and business telephone solutions nationally to small, medium, and enterprise-level businesses for a comprehensive unified communications experience. Two distinct Class 5 geo-redundant VoIP platforms are offered in addition to fax-to-email, phones and equipment, and managed services. Named as Richmond’s 11th fastest growing company by Richmond BizSense, Simplicity VoIP’s key to success is its on-site service, installation and training supported 24/7/365 by a world-class client services team.

 


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