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Cryptocurrency Development 101
Cryptocurrency Development Goes Beyond Bitcoin
In 2009, bitcoin entered our collective consciousness. The first cryptocurrency built using blockchain, it quickly became synonymous with cryptocurrency itself — and, erroneously, blockchain, the power behind it. Soon, other competitors would enter the picture, such as Ether, but even today, bitcoin remains king within the ecosystem.
Considering working with a software company like BairesDev to bring cryptocurrency development into your organization? No matter how you’re planning on doing so — whether you want to accept it as payment or get into the development game — here’s what you need to know about this important and valuable electronic money model.
What Is Cryptocurrency?
Cryptocurrency is a type of digital currency. Like physical money, it can be used to purchase goods or services. There are currently thousands of different kinds of cryptocurrency, with some more well-known than others.
Cryptocurrency uses blockchain, a secure, unalterable, decentralized ledger that keeps track of transactions. These transactions take place from peer to peer via blockchain with no intermediary, such as a bank, which allows them to take place efficiently.
It’s worth noting that blockchain isn’t just used for cryptocurrency, although that’s what initially propelled it to fame. It’s also used for transactions in a variety of industries, from finance to retail to real estate. Even smart contracts incorporate blockchain to ensure that signatures are unalterable and secure.
What About Wallets?
Wallets enable you to send, accept, and store cryptocurrencies. There are several types of wallets, such as hot wallets, which the user can access from anywhere online. One example of a hot wallet is a cloud wallet. On the other hand, cold wallets facilitate offline cryptocurrency storage and can accept payments even when the user is offline, although the user must be with the wallet to make payments. An example is a hardware wallet.
Benefits of Using Cryptocurrency
Some of the biggest companies in the world accept cryptocurrencies as payment, including Microsoft, Wikipedia, AT&T, and many others. That’s because cryptocurrency development offers a number of advantages for businesses and individuals alike. For example:
- It offers securityBlockchain is a secure technology, a safer way of processing transactions than more standard and traditional systems of payment. Moreover, it’s impossible to forge or counterfeit cryptocurrency. Users can also limit the amount of their sensitive, personal information that is exchanged during a transaction, in contrast to credit cards.
- It’s popular and versatileSince it entered the picture, cryptocurrency, especially bitcoin, has gained enormous popularity. If businesses accept cryptocurrencies, they could open up the base of customers they can attract to their services, no matter what industry they’re in.
- It limits transaction feesGiven the lack of third-party intermediaries involved in processing transactions with cryptocurrency, transaction fees are eliminated using this type of funding.
- It could allow users to evade inflationAgain, without banks acting as an intermediary, people who use cryptocurrency won’t have to worry about their money losing value over time, unlike investment accounts and even physical money.
- It’s accessiblePretty much anyone can use cryptocurrency from any device with an internet connection, including laptops, mobile phones, and tablets. Some countries with weak economies, where people have less access to banks and credit cards, are embracing it for this very reason.
Potential Drawbacks
While cryptocurrency development offers a number of advantages, it isn’t without its critics. There are some drawbacks to using it, such as:
- The value is not fixedCryptocurrency is only valuable if you can find a buyer willing to exchange it for something of greater or equal value. In the past, it has increased in value, but there have also been times when the currency has reached alarmingly low value levels.
The COVID-19 pandemic has presented an abundance of challenges to cryptocurrencies like bitcoin, for example. The value of bitcoin has dropped significantly during the global crisis, and this isn’t the first time that’s happened. - It’s not regulatedCryptocurrency isn’t regulated by financial institutions or the government. While it is legal in countries such as the United States, it lacks supervision and oversight, which means it presents some risks to those who embrace it. For example, it’s not possible to receive refunds for purchases made using cryptocurrency.
- It isn’t immune to theftThere have been numerous scams and other crypto-crimes that have been enormously costly to their victims. Malware, phishing schemes, and other cyber-crimes can exploit users of cryptocurrency and steal their money.
- It can be difficult to understandFor those who are not particularly tech-savvy, cryptocurrency development can be confusing. This, of course, makes it more difficult to use. If you’re looking to incorporate it into your business, it’s best to turn to an established and trusted software development company like BairesDev to help you.
- It has been associated with scandalsThis has steadily become a currency of choice for crypto criminals who can easily steal and trade it on black-market platforms. There have been numerous scandals involving markets like Silk Road, and these criminals can remain anonymous while using the non-regulated funds, too. This has resulted in damage to cryptocurrency’s reputation.
Getting Started with Cryptocurrency Development
Cryptocurrency has many applications and could fundamentally change the way we interact with and use money. Given its current popularity, its impact could be far-reaching, beyond what we can even imagine. If you’re considering implementing a cryptocurrency development model in your organization, it could bring you a wide range of benefits and advantages.
BairesDev can help you incorporate cryptocurrency and ultimately improve your business model. To get started, contact us to learn what we can do for you.
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