Can I pay in crypto?
In today’s world money flows through banks just as water through a river and Cryptocurrencies have come in like a tsunami shaking up the somewhat predictable currency market.The largest wave hitting in the form of BITCOIN.
Bitcoin is a worldwide cryptocurrency and digital payment system . Unlike usual currencies ,cryptocurrencies like bitcoin are set up in such a way that they are independent of any government, meaning that they are decentralised.
Not having a regulatory authority has its own merits and demerits. On one hand it gives the power of choice and control over the currency to people. The currency exits as long as the people want to transcat in it. But then again it creates a market that is extremely unstable and unreliable.
To run this decentralized system we need to set up a structure that verifies transactions and its truthfulness. In the real world this is done by the traditional banks but here, this is done through a technology called blockchain.
In simple terms using this technology a public ledger is maintained, keeping track of all the transaction that has happened throughout the course of the currency’s existence. And unlike a bank this is not stored in a single server or location. A copy of this ledger is maintained in every computer used to mine bitcoin. So technically every transaction is publicly verified.
Now that we have seen how a trust-less system is established,we can dwell deeper into how it is verified publicly. To obtain any form of cryptocurrency we have to mine for it. This is a process where your computer’s hardware is put to the test. In the case of all cryptocurrencies one will have to use a software called as a cryto wallet that will allow them to mine for these currencies.
During this process a mathematical puzzle(hash puzzle) is presented to the computer and upon the computer finding its solution the currency is rewarded.
This computational work is what is used as a “proof of work” in order for a transaction to be entered into the ledger (i.e) the blockchain. At each step security is ensured through the usage of cryptographic techniques in order to encrypt the transaction details.
Every transaction must also be verified by the sender of the currency, and that is done through digital signatures.
Using a 256-bit public key in combination with the details of the transaction itself a digital signature is created exclusively for that particular transaction. This ensures that the signatures cannot be copied from one transaction to another.
Taking into consideration the merits it has over traditional currency especially it being decentralized makes it all the more possible for people to want to convert to this form of currency.
It is a revolutionary idea that challenges the state of currency and might emerge the winner considering the advantages it has over traditional currency. In a world where countries cannot protect their own citizen’s data,people prefer the ease and security provided by cryptocurrencies and hence it seems to be the future.
So..the question still remains, can I pay in cryto?