A Simple Explanation of Cryptocurrencies
Cryptocurrency is a better way
Cryptocurrencies are not controlled by an any organisation or individual.
We currently rely on banks to keep that ledger up to date. If the bank goes bust with our money on their ledger then we might well say goodbye to the money.
Certainly the bank will charge you (or the receiving party) for digitally transferring your money.
With a cryptocurrency everyone who uses the currency has a copy of the ledger. No one person or organisation is in control of the ledger.
All the currency rules and regulations are clearly defined and the currency system itself is open source. This means that everyone who is using the currency is controlling the currency, but there is nobody in charge. The cryptocurrency manages itself.
This sounds fantastically complicated – and it is, however just as you don’t need to understand how an iPhone works to gain great benefit from it, the same is true of cryptocurrencies, and they are getting more accessible with each forward step of the technology. Electroneum is one such step.
Why not use a bank?
Being able to transfer money to someone else without having to use a bank dramatically reduces the complexity and increases the speed of international transfers. This makes international trade easier and cheaper.
With the amount of fraud that is reported online people are fearful of entering their financial information to make purchases, especially for small, low cost items. Cryptocurrencies can be anonymous, and protect the payor and payee.
There are over a billion people in the world that do not have access to a bank, and yet they have access to the internet. There are over 2 billion people in the world without a bank account, and mobile devices and internet access is growing fast.
Why use a cryptocurrency?
Store value securely, privately and digitally.
Move that money around the world almost instantly with zero cost. There are over 210 million people who use PayPal to make internet transactions 1 – even though they have a working bank card that they could use to make the payment directly.
They chose PayPal for additional security and convenience. Cryptocurrencies offer a high level of security and anonymity without requiring a bank to be involved.
References
1https://www.statista.com/statistics/218493/paypals-total-active-registered-accountsfrom-2010/