WHAT IS A CYRPTOCURRENCY
A cryptocurrency is a digital/virtual currency that uses cryptography for security. A cryptocurrency is extremely hard to counterfeit because of its security feature. A defining feature of a cryptocurrency is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government and authority manipulation or interference
BENEFITS
Cryptocurrencies make it easier to transfer funds in a transaction, these transfers are eased through the use of public and private keys for security reasons. These fund transfers are done with minimal fees, allowing users to avoid the high fees charged by most banks and financial institutions for wire transfers.
Central to the appeal and function of Bitcoin is the blockchain technology, it stores an online ledger of all the transactions that have ever been conducted using bitcoins, providing a data structure for this ledger that is exposed to a limited threat from hackers and can be copied across all computers running Bitcoin software. Every new block generated must be verified by the ledgers of each user on the market, making it nearly impossible to forge transaction histories. Many experts see this blockchain as having important uses in technologies, such as online voting and crowdfunding, and major financial institutions see potential in cryptocurrencies to lower transaction costs by making payment processing more efficient.
DRAWBACKS
However, because cryptocurrencies are virtual and do not have a central repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of the holdings does not exist.
Since prices are based on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely.
The anonymous nature of cryptocurrency transactions makes them well-suited for a host of nefarious activities, such as money laundering and tax evasion.
Cryptocurrencies are not immune to the threat of hacking. In Bitcoin's short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value. Still, many observers look at cryptocurrencies as hope that a currency can exist that preserves value, facilitates exchange, is more transportable than hard metals, and is outside the influence of central banks and governments.
