You’ve heard of cryptocurrency before. No? You must have heard about Bitcoin at least. Ever wondered what these are? Wikipedia defines cryptocurrency as “A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.” On 9th January, 2009, a certain anonymous guy on the internet going by the name of Satoshi Nakamoto created something called Bitcoin and released a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. Initially people would mine Bitcoin just out of curiosity. It was all fun and games back then. It was worthless but fun. Who wouldn’t want a cute virtual currency and trade it to someone willing to give them the latest video game for it? In the recent few years though, things have changed and now the previously worth-nothing bitcoins are worth a lot. How much do you ask? As of this writing, 1 Bitcoin is 6,66,960.82 rupees or 9357.04 dollars. That is a lot of money! Satashi Nakamoto is said to have mined over a million bitcoins and there are many others who have a lot of bitcoins with them. Now there are many digital currencies like Ethereum, Monero, LiteCoin, Nem, and so forth.
So why are cryptocurrencies creating such a buzz? Is it purely because their value has risen and with it the number of cryptocurrency millionaires? The answer is yes but it is much more than that. See, most cryptocurrencies use something called a blockchain which is necessary for mining or trading them. This technology is being seen by banks and other institutions with great curiosity, as they feel it would play an instrumental role in shaping the digital economy and the internet marketplace. So what are the advantages of cryptocurrencies over traditional money in our banks?