Review of the book on economics – The Rise of Money, Niall Ferguson’s Financial History of the World

Cryptocurrency is a digital asset that is mainly used as a transaction medium to secure financial transactions, control the creation of additional assets and verify each transfer of funds with the help of strong cryptographic technology. It is also known as a form of digital currency or virtual currency. Unlike the central banking system, it is a decentralized system of control and financial transactions that works through a blockchain that is mainly used for financial transactions.

The first decentralized virtual currency developed in 2009, Bitcoin is known as a virtual monetary unit and operates independently without the help of any central bank or administrator. Since then, about 4,000 altcoins of different bitcoin variants have been developed. Bitcoin is considered a peer-to-peer electronic cash system in which users perform transactions directly without any intermediaries.

Blockchain is a data file that consists of numerous blocks that keep records of all previous bitcoin transactions, but also the creation of new ones. The usual average time between each block is about 10 minutes. The most common use of bitcoin is supported by external software called Bitcoin Wallet. Using this software, you can easily store, receive and manage bitcoin unit transactions. To make transactions using bitcoin, you need to have an account on any of the bitcoin exchanges around the world, and you need to transfer fiat currency to that account. Thus, the account holder can perform future transactions using these funds. Apart from bitcoin, one of the other sources of cryptocurrency is oil, which is mainly used for oil and mineral reserves.

There are some advantages and disadvantages associated with using digital currency. The main advantages of using virtual currency are the following: –

• Provides a fast layer of transparency: –

Bitcoin usually works with the help of a book called Blockchain that records and tracks every transaction. When a transaction is executed and entered in this book, it is considered static. These transactions can be further verified at any time in the future and thus, in addition to this, security and privacy are also ensured in relation to all transactions executed through a particular account.

• Fast processing and portable use: –

Billions of dollars of bitcoin can be easily transferred from one location to another without any detection with the help of one memory drive. When performing any type of transaction, the involvement of any third party can be eliminated by using this bitcoin technology. This will result in a simple and fast transaction without any third party approval,

• Low transaction costs included: –

The transaction costs involved in exchanging these digital currencies are much lower which makes them more affordable than the actual currency for the population around the world. Therefore, the cost of any type of transaction is very lower, which turns out to be a favorable feature for the population whenever they perform any transaction.

• Fights and eradicates poverty: –

Often banking systems and financial institutions do not provide assistance or assistance to particularly backward classes in rural areas. Bitcoin serves as an alternative in cases where it expands its robust financial services to anyone who has access to the Internet. It often serves to support the poor and oppressed classes, who in most cases have not been given any viable alternative.

As well as when new or latest technology arrives, there are some negative factors associated with its use, and these are:

• Lack of knowledge and distrustful approach of the population: –

Lack of knowledge about digital currency is more likely to make people distrustful of its widespread use. Thus, there are only a small number of business systems that accept these sources of cryptocurrency, which limits business systems that prefer to use virtual currency in their day-to-day transactions.

• Non-traceable transactions: –

Because bitcoin transactions cannot be traced, this provides room for criminal transactions. In such cases, drug dealers and scrupulous people are the ones who use such virtual currency so that their illegal activities would not be easily detected.

• Volatile and uncertain nature: –

Cryptocurrency is volatile from time to time and continues to change frequently on a large scale. Sometimes people make a fair amount of money when the market rate of these virtual currencies skyrockets, and sometimes they face a big loss when the price falls.

Cryptocurrency is an innovative but amateur concept that can potentially disrupt the entire financial market. It is true that this digital currency has attracted worldwide attention in a short time. Every new technology that appears on the market always has advantages and disadvantages. To make the most of this, both sides need to be considered before making any decision.