“Predicting the future isn’t magic, it’s artificial intelligence” – Dave Waters. This very quote indicates that AI is paving its way towards characterizing every aspect of the human race. Whilst the economists from around the world were speculating over the job indices, and market infrastructure and growth based on the future valuations and investors pinning their hopes on the dot-com companies (the Year 1995-2000) created a stir in the economical blue-print of the world (NASDAQ). This erupted as a volcano hiking the Composite Stock Market Index to a whopping 400%.
The invention of the computer (Digital revolution) can be conformed to the existence and interpretation of Artificial Intelligence since the 1940s. The economist and Nobel laureate Milton Friedman (way back in 1999) predicted the future of reliable e-cash system. Fast forward 2009, Nakamoto Satoshi (it is still unknown if it is one person or a group of people) created a Peer-to-Peer Electronic Cash System (or Bitcoin).
Digital Currencies and its Modus Operandi
As of the year 2015, CPMI (Committee of Payments and Market Infrastructure) analyzed the characteristics displayed by the Bitcoins (first lot of cryptocurrencies).
So, what is a cryptocurrency (digital currency) and how is it used?
- These are usually used as a means of payment.
- Are not regulated by a central authority. The distribution channels are primarily the non-banking sector.
- These are transferred via an inbuilt distributed digital ledger (also known as Distributed Ledger Technology or DLT).
Facts about Cryptocurrencies
- The market valuation of Bitcoin and other forms of the cryptocurrencies has plunged to a staggering $414 Billion (as of February 2018).
- The first-ever launched cryptocurrency was Bitcoin (BTC) which currently captures 35% of the digital currency market share. Bitcoin valuation did fall within the period of 2014-2016, however, its resurrected as a stronger currency by early 2017.
- More than 300 versions of cryptocurrencies are available in the market today.
- The public ledger details can be found on coinmarketcap.com. This website enables the reader with information (in USD) on cryptocurrency exchanges, currency values (high, low, and close, respectively), market capitalization, and trading volumes.
- Another forum to decipher trading and general information on Bitcoins is bitcointalk.org.
- In order to make profits, the candidate must adhere to the ‘Peak’ data values (a 7-day rolling average) which must be greater than or equivalent to 50% of the 30-days prior least value margin.
- A ‘dead’ or ‘abandoned’ cryptocurrency can regain its value in the due course. This phenomenon is dormant in other forms of currencies.
- Cryptocurrencies are based on a blockchain ‘permissionless’ technology system. It has its candidates operating as A. Bookkeepers or “Miners” and B. Candidates transacting the currency or “Users”.
- The entire system of currency maintenance and exchange is executed with the help of a set of software source codes.
- Recently Starbucks in association with Bakkt (Another Cryptocurrency company) (as on the 6th of August, 2018), has confirmed that it will assist in synchronizing digital consumer applications in the retail outlets to help interchange a cryptocurrency (or digital currency) into the permissible forms of currency denominations.
Given the current quandary of the payment systems, cryptocurrency comes as a ray of hope. However, one must follow the protocols with utmost attention and knowledge to avoid any jeopardy.