Barring a slow 2018, when the crypto market was still licking its wounds, 2019 happens to be a good year. Most of the currencies have bounced back and even though there seems to be the cloud of uncertainty in the distant future, they are holding on as of now.
Bitcoin, the undisputed king of the market, is being traded at a notch below $6000, while the Altcoins are not doing to bad either. Litecoin, Ethereum to name a few of the most important ones, are vying for the rest of the market share, which itself is grappling against the possibility of tighter regulations and government oversight.
Amidst all these speculations one thing we may have missed is the basic question that most of us wanted an answer to is why is cryptocurrency in the eye of a storm?
The answer is that cryptocurrency is a digital currency in which encryption processes are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank or an authorised institution.
It based on the blockchain technology which uses the premise of universal ledger hence increased security.
According to Jan Lansky, a cryptocurrency is a system that meets six criteria:
It is a centralised system and hence there is no regulatory oversight. It is primarily maintained through distributed ledger and consensus.
The system keeps an overview of the ownership of the coins
The system is pro-definition. It will define the conditions under which new cryptocurrency can be created. Once created, the ownership of such a currency will be defined too.
The ownership of crypto can only be proven cryptographically. This makes cryptocurrencies one of the most secure forms of cash.
Ownership of cryptocurrencies can be changed. If two separate changes of ownership are instructed, then the system will adhere to almost, one.
Cryptocurrency is seen as a viable alternative to the conventional mode of transaction but here is where things get muddled. One of the reasons why cryptocurrencies enjoy the stardom is because of its unbridled freedom. That is about to change since money laundering and economic fraud became serious circumstances. Governments will be pushing for legislatures to hold control or partial oversight on cryptocurrency.
That sounds like a death knell.