What is cryptocurrency: concept, pros and cons of cryptocurrencies

Over the past 3 years, the cryptocurrency market has turned from a small experiment into a full-fledged financial sector of the economy. Back in 2015, the market capitalization of digital assets did not exceed $ 1 billion. Today this figure is approximately 250 billion.

In early 2018, a futures contract for one of the digital assets was launched on the CME and CBOE exchanges. This was the first step towards legitimizing cryptocurrencies. To understand the prospects of this market, you need to understand what cryptocurrency is .

What is cryptocurrency

Cryptocurrency (from the English cryptocurrency ) is a type of decentralized digital currency that is used both as an electronic means of payment and as electronic money. Also, many users consider cryptocurrency to be an investment tool. The creation and accounting of digital currency is based on cryptographic methods.

For the first time such an asset appeared in 2009. At first, the cryptocurrency was not taken seriously and had a low market value. Today there are about 2,000 types of digital assets, and the cost of the first cryptocurrency reaches $ 10,000 (at the price peak of 2018, the cost exceeded $ 20,000). 

Decentralization of a cryptocurrency means that it does not have a single built-in or external issuing organization (for example, for national currencies, such an organization is the Central Bank). Instead, the users themselves, united into a single network, are engaged in the "emission" of digital currency. The important concept here is blockchain and block of transactions.

Blockchain is a chain of blocks that contains information about cryptocurrency transactions and is lined up in a certain continuous sequence. In such a system, a transaction is considered complete if its signatures have been verified, and the operations themselves have been recorded in a block and combined with a chain of other blocks. Moreover, each block of transactions contains information about the previous one, and in order to change the information in one block, you will have to change the data in all elements. Therefore, the longest chain of blocks is considered the true and most reliable. In such a structure, there is data on all transactions that have ever been carried out. This means that it will take too long to fake a block of a transaction using a brute-force attack.

At its core, a blockchain is a complex, tree-like distributed database. The model was first implemented in 2009 in the Bitcoin cryptocurrency system . To keep the blockchain unchanged, other cryptographic methods are also used: digital signature with a public key, sequential hashing. At the same time, information about the transactions themselves is not encrypted. it is not necessary.

Due to decentralization, cryptocurrencies do not have a single external or internal control center. Transactions between addresses are completely independent - they cannot be influenced from outside or stopped. For users, this means complete freedom of action, since in decentralized systems, data on the owners of addresses is not indicated.

Cryptocurrencies and electronic money based on blockchain technology can be defined by the following criteria:

1. Lack of regulators . The government, central bank, and executive bodies cannot influence the issuance, exchange, purchase, or sale of digital currency. No one can influence the cost of a cryptocurrency or the speed of its production - these parameters are determined by the market and the initially set algorithms, respectively.
2. Pseudonymity . Transactions between any addresses are shared. At the same time, data on a specific address does not give an understanding of who owns it. This is called pseudonymity.
3. Using encryption . All digital assets have a hash function in their structure - an algorithm that processes data and calculates blocks. Hashing guarantees the machine accuracy of the system while it is running.
4. Transaction security . The blockchain system guarantees users that any cryptocurrency transactions will be successful. An exception may be situations when users, on a contractual basis, have temporarily blocked their cryptocurrencies for the implementation of a smart contract or the use of multisignatures.
5. Open source . Most cryptocurrencies openly host the source code of their system for free analysis. All existing digital currency systems use part or all of the Bitcoin source code.

The social demand for a secure and private digital payment instrument appeared 1-3 years before the creation of Bitcoin. Today, private and government banks try to restrict users as much as possible. Analysis of purchases and expenses helps to more effectively sell new banking products, collect information about customers. This is beneficial for the state as well - it is easier to control people and regulate their activities.

Cryptocurrencies allow you to bypass existing limits and freely conduct financial transactions on the Internet. This may be why some states are trying to ban them by managing the legal regime of digital currency. This is primarily related to security - cryptocurrencies can become part of the exchange system on the black market. So, the Central Bank of the PRC in 2016 banned financial institutions from conducting transactions with Bitcoin.

Digital money and blockchain technology have revolutionized the world of finance. Now humanity has a system that cannot be cheated or misappropriated money with its help. Today in the fintech industry (financial technologies - IT solutions for banks and financial structures) there is a separate area that studies and implements blockchain in the banking sector.

What is cryptocurrency in simple words

For a visual understanding of the device of cryptocurrencies, we will give an example with bitcoins. Imagine a network of many computers. None of them is the main one and does not affect the actions of the other. Moreover, each computer is included in the "Bitcoin" network, has its own address and computing power.

You can conduct transactions between addresses - an agreement on the exchange of bitcoins. The current owners of the coins have a certified receipt - a document from the previous owner confirming the transfer of bitcoins.

Lets say Masha wants to transfer 10 bitcoins to Katya. It creates a transaction that indicates the number of coins to be transferred, as well as a certified receipt from the previous owner. Masha openly publishes the transaction to the network, simultaneously creating two encrypted notes. She openly gives the encrypted note to Katya, and keeps the other for herself.

Now you need to check Mashas transaction and make sure that she honestly received these 10 bitcoins. This requires processing power. So, the miner Sasha creates a block and enters a transaction there, confirming the legality of the transfer. Miner Sasha is the owner of a more powerful computer that can process transactions quickly. For the created block, he receives a reward in the form of bitcoins (satoshi).

After Sasha has confirmed the validity of the transaction, the network automatically transmits to Katya the key to unravel the encrypted note. Katya decrypts it, after which the note turns into a certified receipt from Masha. Thus, Katya becomes the new owner of 10 bitcoins.

In a real Bitcoin system, this operation looks like this:

• 4Mugb335sUFypFGhmNCreREkTHdTyfJTap (Masha transmitted);
• 4M1ct5KhHR3YE6fy3ND8e8ARNektUBUudR (Kate 10 BTC).

At the same time, it is not indicated who Masha and Katya are. A certified receipt in such a system will indicate the owner of a specific address, but will not provide his personal data. Therefore, transactions are considered pseudonymous.

Blocks are created from transactions, which are built into a single chain - blockchain. In reality, a “receipt” is an electronic digital signature, two encrypted notes are paired public keys, and the private key of the first owner acts as a key to the note. This is how the Bitcoin system works, and with it the algorithm of most modern cryptocurrencies. Users can exchange electronic money, and miners are rewarded for the processed blocks, mining new means of payment. This method of exchange is considered more reliable, since the guarantor is not one legal entity (for example, a bank), but all users of the system.

Speaking of cryptocurrencies even easier, we can say that this is electronic money that does not require an intermediary to conduct transactions with them. Digital currency bypasses the banking system, making it useless and redundant. The exchange system implemented in the cryptocurrency provides trust between the parties, in cases where there cannot be a priori trust between them.

How the idea of creating cryptocurrencies appeared

The first ideas for creating a cryptocurrency appeared in 1998. Then, independently of each other, informal lovers of cryptography and Nick Szabo, a scientist in the field of computer science, cryptography and jurisprudence, started talking about digital money. In 1998, Szabo developed an algorithm for a decentralized digital currency, calling it "digital gold" ( bit gold ). He also described the market aspects of using such a system. Until now, his developments are considered the forerunners of Bitcoin and cryptocurrencies, although they were not implemented in practice in those years.

On October 31, 2008, a certain Satoshi Nakamoto published an article on the website metzdowd.com "Bitcoin: A Peer-to-Peer Electronic Cash System". The article and the attached file described the operating principles and structure of the decentralized Bitcoin network. It is still unclear who is hiding under the identity of Satoshi Nakamoto. Experts suggest that either one person or a group of scientists can stand behind the pseudonym. Some researchers believe that Nick Szabo is hiding under this pseudonym.

In the article, Satoshi Nakamoto claims to have started developing the system and interface in 2007. In 2009, the creation of a client for the Bitcoin network was completed, after which the open source code of the program was published. The "zero" block was created on January 3 of the same year, and with it the first 50 coins, which went to the developer. On January 12, the first transaction took place: Satoshi transferred 10 bitcoins to Hal Finn, the creator of the idea for a connected chain of hash blocks.

Already in September 2009, the first Bitcoin fork appeared - the Namecoin storage system for arbitrary combinations. A fork is a project that has a different purpose from the Bitcoin program, but is based on its code base. The second Bitcoin-based cryptocurrency was released in 2011. All forks have received unofficial name - altkoiny (from short «. Alternative » - an alternative).

Further developments in the area of blockchain and Bitcoin forks implement some ideas, and not just a payment system. So, in 2015, the Ethereum platform was created - a decentralized online service based on Turing-complete smart contracts. Smart contracts have been incorporated into the Bitcoin system, but have not been finalized. Ethereum has perfected this concept, making it the second largest cryptocurrency by market capitalization after Bitcoin.

Cryptocurrencies are considered one of the greatest breakthroughs in the IT industry of the 21st century today. Many scholars argue that blockchain technology can find applications in hundreds of different directions, from document storage to bank transfers.

Bitcoin is the first cryptocurrency

In 2009, Bitcoin emerged as a response to an imperfect financial sector. The world financial crisis of 2008 showed that banks in different situations show themselves as a low-quality intermediary. It was necessary to create an independent, but at the same time honest and modern payment system.

Bitcoin is the first such system to use cryptography to protect money transactions. For calculations within this system, the monetary unit of the same name is used - BTC. Since from an economic point of view, BTC can be considered money, they have a certain market rate. To estimate the value of bitcoins, their price is most often reflected in US dollars. Cryptocurrency and money are often compared with each other, and for standard means of payment in the cryptocurrency environment, there is even a term - fiat. The difference between cryptocurrencies and fiat money is that the former do not have a specific nominal value set by the state.

The bitcoin denomination in each transaction can be divided into several parts. The minimum amount for crushing is 10 ^ (- 8) (ten to the minus eighth power) and is named "Satoshi or Satoshi" - in honor of the creator of the first cryptocurrency.

Initially, Satoshi Nakamoto assumed that the cost of bitcoins would depend on the amount of electricity used to process transactions. Today, processing and mining the first cryptocurrency coins requires more electricity than all of Switzerland consumes. But in practice, many factors affect the price of one coin:

• Bitcoin policy;
• legal status of cryptocurrency in different countries;
• market speculation;
• technical network updates and forks.

In September 2009, the first exchange of cryptocurrency for fiat money took place. Then the owner of 5050 bitcoins transferred them to another user, for which he received $ 5.02 on the PayPal account. It is easy to calculate that then the value of the currency was slightly less than $ 0.0001. Today, the value of a coin on the cryptocurrency market ranges from 8-10 thousand US dollars. As of the winter of 2017-2018, at the peak of the rise, one bitcoin could earn about $ 20,000.

It is no coincidence that Bitcoin is called “digital gold” and the coin is used as an investment vehicle. Over the 10 years of the existence of bitcoins, the price of one coin in percentage terms has increased more than 2 million times. For comparison, a similar indicator of the growth in gold prices for the period 1830-2013. reaches about 8000%. Therefore, more and more players appear on the digital money market who seek to invest in bitcoins or speculate on fluctuations in the value of the first cryptocurrency.

Bitcoin Core software is used to store and exchange bitcoins. There are concentrated the addresses where the cryptocurrency is located - wallets. Today, there are both offline computer wallets and online solutions from many developers. The Bitcoin Core service is the most reliable as it was created by the Bitcoin development team, but it is considered too cumbersome.

Satoshi Nakamoto himself left the Bitcoin development team in 2010. Since then, the development of cryptocurrency has been on the shoulders of the developer community. The last major update came in 2017 when the structure of the transaction block was changed.

Who issues cryptocurrency

As noted earlier, cryptocurrency issuance is decentralized and does not have an external issuer. In most cases, the exact amount of digital money is known in advance. So, the maximum number of bitcoins is 21 million coins. This volume will be roughly reached in 2140.

Initially, a certain number of coins are laid in the zero block of the blockchain. This cryptocurrency goes to the creator of the system. In the process of exchanging cryptocurrency, new blocks are created, which contain a reward in the form of cryptocurrency. It is received by miners - the main miners of new coins.

Mining (from the English mining - extraction of minerals) - the process of processing transaction blocks in order to receive a reward. The internal resources of the computer are spent on processing - initially the blocks were created using the power of the central processor. This method of obtaining cryptocurrency is called proof-of-work and allows you to protect the system from illegal receipt of electronic cash. First used for BTC.

The system is programmed so that after the creation of 210,000 new blocks, the amount of the reward is reduced by 2 times. So, when Bitcoin was launched, the size of the reward was 50 coins. Today that figure is 12.5 BTC. The reward of less than one bitcoin is expected to be achieved in 2031.

With the increasing popularity of the first cryptocurrency, the power of processors alone became insufficient. For greater profitability, GPUs were used. To increase earnings, miners began to combine a large number of video cards together - this is how the first mining farms appeared. After that, farms with FPGA processors were used, which were more efficient than conventional video cards. In 2013, mining without processors focused solely on hash processing was deemed unprofitable as it consumed too much electricity. ASICs have become such highly specialized equipment - processors designed to process blocks of Bitcoin transactions.

To reduce the load on equipment and increase the likelihood of a reward, miners are pooled. Pools are special federating web systems. Each pool member looks for their transactions in one block and sends the result to the pool owner. As the main miner, the owner of the pool sends data to the network and receives a reward. After that, bitcoins are divided equally among the pool members, and the owner receives a small commission. Most of the pools are located in China - about half of the mining capacity is in the three largest pools in the PRC.

The program of many cryptocurrencies, such as Bitcoin, has a block mining time of about 10 minutes. It seems that with the increase in the number of miners, the processing time should decrease. In fact, every 2016 blocks, the complexity of the calculation is automatically adjusted. So, with any power included in the mining, the speed of solving 2016 blocks is always approximately equal to 2 weeks.

But the reward is given not only for solving entire blocks. Each transaction implies the existence of a commission to the miner - the difference between the “incoming” and “outgoing” number of coins. The higher the commission, the higher the priority of the transaction in the block being solved, which means the faster it will be processed. For this reason, it is not recommended to create operations without any reward for miners at all - they will take too long to process. The commission on the Bitcoin network today can be $ 1-10 per transaction, but this is approximate data, because, as we said, the appointment of the amount of reward is the business of each user who wants to make a transaction.

Despite the great opportunities for earning money, PoW mining has certain drawbacks, especially in the early stages of cryptocurrency evolution. The main one is the possibility of carrying out a 51% attack. If one miner or group controls more than 50% of all mining capacity, then they can only confirm their blocks of transactions. Thus, 100% of all mined coins will be concentrated in the hands of the attackers.

In addition to receiving a reward for the power spent on processing the block (proof-of-work), there are other methods of mining cryptocurrencies:

1. Proof-of-Stake . Translated as “proof of ownership”. With such protection, the probability of a new block forming and receiving a reward is proportional to the number of available cryptocurrency coins. If a user stores 10% of the total number of coins, then the probability of creating a new block is the same 10%. The system was first applied to PeerCoin in 2012.
2. Proof-of-Space . Mining new blocks consists in allocating a certain amount of memory or disk space on the computer. The owner receives a reward for help. For such mining, a small HDD is enough. For the first time, the method was applied to the Burstcoin cryptocurrency.
3. Proof-of-Activity . A method that has not yet been implemented. The owners enter the general mining process only after spending some of the computers power. This method significantly reduces the probability of a 51% attack.
4. Proof-of-Research . Otherwise, "proof of research." Combination of two protective algorithms PoW and Proof-of-Stake. The system was implemented for the GridCoin project, performing calculations using PoW for the BOINC project.

The technical side of digital money is constantly changing. Developers are coming up with new ways to protect network operations. Despite this, the Bitcoin system has never been subjected to a serious attack and is currently in a decentralized state.

Positive aspects of cryptocurrency

In 2018, the total number of cryptocurrency users exceeded 35 million. More and more people want to appreciate the benefits of digital money over fiat money. Some are looking for a confidential payment system in cryptocurrencies, while others are looking for a way to invest funds. Still others buy ASIC processors and even register businesses by creating their own mining farms.

Digital cash would not be so popular if not for its properties. It is worth considering that the characteristics of coins and the possibilities of their use change from system to system. In general terms, the following advantages of cryptocurrency can be distinguished :

1. Earning opportunity . The first thing that attracts people to cryptocurrencies is the potential of mining. ASICs are costly. The price for the cheapest model today equals 25-30 thousand rubles. At the same time, the equipment requires maintenance, additional parts and knowledge in the field of computer architecture. With the right choice of miners, the payback of mining some new cryptocurrencies is 4-6 months. Bitcoin or Ethereum cannot be mined in this way - there is too much competition.
2. Profitable investment . It is quite possible to buy one bitcoin for $ 4,000 and sell for $ 8,000 a month later. None of the existing banks or investment instruments will provide a monthly rate of return of 100%. Therefore, thousands of users use cryptocurrencies as a means of investment. Among the most popular coins: Bitcoin, DASH, Ethereum, Ripple , EOS, Litecoin . You can also speculate with cryptocurrencies on special exchanges. Due to the high volatility, competent closing of positions can bring in up to $ 2,000 per month, even with a small budget.
3. System reliability . Digital money completely eliminates the human factor. Thanks to the blockchain structure, the transaction will be completed anyway, even if the user did not include a commission for the miner. The security of transactions with cryptocurrencies is ensured by hundreds of thousands of users around the world. Thanks to the multisignature system and smart contracts, it is possible to further secure each specific transaction by adding an arbiter or additional checks to it.
4. Partial confidentiality . Despite the openness of transactions and the visibility of addresses, it is impossible to determine the previous and current owner of the cryptocurrency during the exchange. Some systems, such as ZCash, ensure complete confidentiality of transactions. So, you can confirm that the transaction is reliable and really happened, but you cannot find out the amount, neither the recipient, nor the sender. This is made possible by using a zero knowledge proof protocol. In this case, the user can selectively specify information about the money transfer.
5. Cheap transactions . Users can conduct cryptocurrency transfers for almost free. Of course, in this case, the transaction time can stretch, but in any case it will be added to a certain block. In 2014, Microsoft founder Bill Gates marveled at how cheap currency transactions can be when using bitcoins. But dont just consider the first digital currency - at its peak in 2018, the BTC transaction fee reached $ 52.
6. Independence from the world economy . Bitcoin and other cryptocurrencies are not a specific issuers debt. Therefore, their quotes depend solely on supply and demand in the market, and are not associated with any other asset. True, there is a correlation between bitcoin and altcoins - most of the forks repeat the rise and fall of the main digital currency. Some experts believe that the value of cryptocurrencies will increase significantly during the next financial crisis.
7. Easy entry . Although mining requires an extremely large investment to enter, and it will take about 6-10 thousand dollars to buy 1 BTC, users can easily purchase cryptocurrency. To do this, people use the services of cryptocurrency exchangers, exchanges or special web services. For example, a customer can purchase a portion of BTC, up to one satoshi (approximately $ 0.000008). And the price for one coin of some cryptocurrencies does not exceed 1 USD (for example, Ripple).

Sometimes, when launching cryptocurrencies, an ICO is held - a project from the creators of the coin, who seek to attract investment from users. During ICOs, tokens are sold for a certain price - virtual receipts, which in the future will turn into cryptocurrency. Having bought tokens cheaply, after that you can profitably sell them on the exchange if the project is successful. Analyzing investment projects and investing in them is a separate part of the cryptocurrency world, where high income can be obtained even with a small budget.

Negative aspects of cryptocurrency

There is still no consensus on the future of digital assets. Some believe that Bitcoin and altcoins are a temporary phenomenon and will lose their relevance in the future due to the introduction of blockchain systems into traditional means of payment. Others see cryptocurrencies as an alternative to the existing financial system.

All experts agree that blockchain, apart from electronic cash, is the most significant innovation of the 21st century. But it is also worth considering the obvious disadvantages of cryptocurrency :

1. Lack of legal status . Today, no country has formally secured the status of a cryptocurrency in its financial environment. In 2016, the Japanese Cabinet of Ministers approved regulations that recognized Bitcoin as a legal vehicle. However, the documents contain a lot of reservations. Other countries do their best to limit the impact of digital assets. Iceland, Bangladesh, Bolivia, Lebanon and Indonesia have banned their citizens from buying or selling BTC, and with it other digital funds. It is unprofitable for many countries to recognize the official status of cryptoassets, as this will lead to a partial rejection of national currencies by people.
2. Fraud . Since legally BTC and altcoins are a form of money, many countries use this status to fight scammers. Cryptocurrencies have been involved in fraud cases several times. For example, in 2013, the Chinese exchange GBL unexpectedly closed, as a result of which users lost about $ 5 million in bitcoins. Often, hackers fake cryptocurrency exchange services or entire exchanges, obtaining data on the bitcoin addresses of thousands of users. Unfortunately, today there are no real methods of countering fraudsters or returning stolen cryptocurrency - the pseudonymity of transactions interferes.
3. Application on the darknet . Due to the confidentiality of financial transactions, digital cash has become hugely popular on the dark web. Darknet is the collective name for a private network in which black online markets and prohibited web pages exist. Markets are most often located on the Tor network. At such sites, you can buy drugs or weapons using bitcoins. At the same time, the government and security agencies will not be able to track the transaction, find out the identity of the buyer or seller. The most famous market on the darknet was Silk Road, closed in 2013.
4. The scalability problem . The size of one block in Bitcoin is 1 MB. It accommodates a limited number of transactions. Due to the great popularity of BTC, the number of transactions increased, but not all of them fit into a block. In 2017, users reported that the waiting time for transactions reached 2 days, which did not correspond to the original concept of the cryptocurrency. To reduce the time, it was necessary to significantly increase the transaction fee, which became unprofitable. To remedy the situation, the development of the Segregated Witness project for Bitcoin is underway. The problem is common for all forks of the first cryptocurrency.
5. Comparison with the economic bubble . Cryptocurrencies are often compared to phenomena such as economic bubbles and financial pyramids. Researchers claim that digital cash has similarities to tulip mania, the South Sea pyramid and the dot-com bubble of the late 90s. This is evidenced by the high volatility and large infusion of cash in different periods of cryptocurrency growth.
6. The problem of exchanges . Many users have lost money due to the collapse of cryptocurrency exchanges. In the process of storing digital currency on the exchange and speculation, the user trusts the cryptocurrency to third parties. At the same time, the owners of the services are not obliged to compensate for losses in case of unforeseen circumstances. So, in 2014, the Mt. Gox filed for bankruptcy due to theft, a total of $ 473 million worth of bitcoins were stolen, and their volume was 7% of all existing coins. Was it theft as a result of a hacker attack or the owners of the exchange personally seized bitcoins - is still unknown.
7. Possibility of future attacks . The 51% attack remains to this day a problem with BTC and similar digital systems. Pools of miners are becoming more and more, which means that cryptocurrencies are losing their properties of decentralization. This can lead to the fact that several large pools merge, starting to control all future emissions.

You can see that most of the disadvantages of cryptocurrencies are related to their privacy. At the same time, users are not ready to give up confidentiality and disclose data about themselves. Fraud and security risks remain the price to pay for transaction pseudonymity. The benefits of cryptocurrencies today outweigh the risks of using them.

Most of the leading financial experts and scientists warn: conduct transactions with cryptocurrencies, buy and sell at your own peril and risk. It is recommended to invest in digital assets only extra funds that are not afraid to lose.

Difference between cryptocurrency and fiat money

Today, most experts note that cryptocurrencies as a means of payment are 10-100 times less efficient than the existing bank transfer system. This is primarily due to the scalability of Bitcoin and the lack of formal regulation.

Cryptocurrencies such as Ripple, in theory, can find further development in the financial sector. In 2019, XRP was awarded the highest rating among other coins by Weiss Ratings for its ability to compete with the existing SWIFT system. If most countries accept the structure and software of Ripple as a means of payment, then this will increase the value of the cryptocurrency on the market many times over. Today the price for one XRP is less than half a US dollar.

If the Bitcoin network is upgraded and SegWit2x is operational, it will solve the scalability problem. The update will significantly increase the currencys capabilities and popularity. Bitcoin and cryptocurrencies have no alternative in terms of completely confidential transactions.

Cryptocurrency and money have several major differences:

1. Regulation . Cryptocurrencies do not have a single control center, and the transfer of coins cannot be completely decrypted. Fiat money is regulated by banks, and transfers are completely controlled by the security services and the government.
2. The number of transactions . The small popularity of cryptocurrencies is incomparable to the daily use of fiat money.
3. Volatility . BTC and altcoins are not regulated, which is why the cryptocurrency rate changes dramatically. The exchange rate of national fiduciary money is under the control of the state or can be controlled by it at any time.
4. Confidentiality . Tracking the owner of bitcoin is almost impossible. At the same time, for bank transfers, the client himself provides information about himself.
5. Security . The Bitcoin system has never been hacked or tricked (although historically there have been threats). Banking equipment and software are regularly hacked and funds are stolen.
6. Processing speed . Ripple transactions are processed within 2 seconds, Ethereum - in 2 minutes, BTC - in 2 hours, SWIFT systems - from 4 minutes to 1 day.

It is too early to talk about the total replacement of fiat money with cryptocurrency. The industry has unique, irreplaceable solutions for the financial and banking sectors. Thanks to cryptocurrencies, the mechanisms for storing and accounting data will change, encryption will become available to most people. First of all, in digital money, you need to value not the possibility of earning or investing, in blockchain technology - the quintessence of developments in mathematics, computer science, cryptography and economics.

Evolution of Cryptocurrencies

As a means of payment, cryptocurrencies have gone from a scientific and technical experiment to a revolutionary way of transferring money. The phenomenon of digital currency is often compared to the invention of the Internet - for the first time, the network appeared as a military development and was developed by a group of highly specialized scientists. Repetition of the success of the world wide web means for many investors a chance to get rich.

The variety of cryptocurrencies today is amazing. Each project seeks to bring something new to the cryptographic transaction system. Such unique projects as Bitcoin, Ripple, Ethereum, EOS are unlikely to ever "burst" like a typical economic bubble. The contribution of these systems to the development of digital finance is too significant.

Many crypto evangelists and digital currency aficionados are predicting Bitcoins growth. Their main argument is limited emission coupled with an increasing demand for the first cryptocurrency. The forecast for the value of BTC is as follows: $ 50 thousand by the end of 2020, $ 100 thousand until 2022, about $ 1 million until 2030. Ordinary users can only invest extra funds in bitcoins and follow the development of the project.