Cryptocurrency is all the rage these days. From the inception of Bitcoin in 2009, people have been discussing the novelty of the technology of cryptocurrencies and the blockchain. But the days of novelty are behind us. These coins are becoming more mainstream as time marches on. Litecoin access, in fact, has just been launched on Facebook, making it an even more convenient payment platform than it already was. While hype has kept these new entries into the world of finance hot on the minds of millions, it has done little to educate them about how these instruments really work or the ingenious concept that makes them possible to begin with.
What is the Blockchain?
The dollar, as well as every other national currency in the world, is valued on the premise that someone will enforce its acceptance and that it represents a real and firmly agreed upon value. This is to say, the Dollar, Euro, Yen, Rial, and Krone all have a value and that they can be traded for goods and services at an agreed upon price. The question then is how are these monetary instruments protected against fraudulent copying– and by extension – value tampering?
The answer is a central bank that regulates the “population” of a currency in circulation and guarantees its value to consumers who wish to use it. The blockchain is different. Rather than encoded information in one central location, blockchain exists as a kind of ledger that extends across a range of node computers. When considering a centralized system, the bank must provide incredible security measures to protect the data surrounding its currency, one intrusion and a deviant actor can manipulate the current ledger, digitally destroy records, or tamper with future infusion or removal of cash into the economy – greatly affecting the value of a currency and the millions of people who use it every day to make purchases. In a blockchain, that data is copied onto thousands or more unique locations and each transaction must validate against those copies. Devious tampering with the blockchain would require thousands upon thousands of unique record changes existing on anonymous computers all around the world – and before the next “block” is validated and added permanently to those parallel records. Bitcoin alone has seen over 290,000 transactions in the last 24 hours. It is theoretically impossible to alter unlike the theoretically complicated process of altering a centralized record.
While the blockchain concept is highly technical and incredibly interesting, it parallels some better known applications that are readily accessible to the layperson. Google Docs functions in much the same way a blockchain transaction does. When your team is compiling a document, each member adds their own thoughts and specific flair to the composition. Rather than creating a word document and sharing it around each time an addition is made, Google Docs allows for each member to gain access to the same document and make real-time edits that each member can account for without spending precious time trying to locate the most recent version.
How cryptocurrency factors into your investment strategy
Cryptocurrencies have risen in stock since the boom at the tail end of last year. Bitcoin, Ethereum, and Monero (among almost all others) all saw giant leaps in price that garnered massive attention. The price of Litecoin saw explosive action, as well. The difference, of course being the enormous cliff that many coins fell off after the New Year, coins of all varieties saw a dramatic course correction in early 2018 that many have not recovered from. Litecoin took a hit as well but has remained fairly consistent in pricing, making it an ideal candidate for your financial investment expansion into the world of cryptocurrencies.
Cryptocurrencies serve as great investment potential, as well as uniquely interesting technological marvels to explore. According to experts, Litecoin and its compatriots are primed for a resurgence at the end of this year, giving new meaning to the phrase “no time like the present.” Now is the perfect time to explore cryptocurrency and its possible impact on your life.