How does cryptocurrency market affect the economy of peoples
- By: Roselee Bachleda
There are many transactions in our global economy. The global retail sales reach 20 trillion dollars annually and the global gross product (GWP) surpasses 100 trillion dollars. So a huge number of transactions and deals use intermediaries and their authentication services to handle trusted companies. We agree that these brokers charge several trillions of transactions in order to prevent fraud and preserve consumer confidence as the cost of doing business. Such costs compress into the economy, raise living expenses and goods and services rates.
This past year, Blockchain technology and cryptocurrencies such as Bitcoin have created several news. It seems that every week another story spins or takes this new technology as a fad with little long-term prospects. If you don’t know blockchain software or are still developing a perspective, let me argue for revolution or how to buy-litecoin .
Recipe for disruption.
Let’s begin with why we trust a company to do business. We trust our largest retailers to provide goods and services to complete our purchases. Our banks are assured that our balance of accounts shall be correct and transactions checked and free from fraud. The systems in place by these organizations build our confidence. For instance, laws, fraud monitoring systems and services all play a role in ensuring a business is done above board. Credit card companies are a specific example of a third party that charges a fee to validate and clear consumer credit for every transaction. In general, each of these parties serves as intermediaries and for each transaction, they offer their services for a fee.
But what would happen if we could test deals in our economy in a cheaper or quicker way? If there were alternatives, the savings would amount to trillions of dollars. Online payment gates, for example, earn a lot of billions by adding over 2.9 percent on each transaction. There is also the effect of time lost. Intermediaries apply days and weeks of delays to properties, credit approvals or renewals of licenses. Reducing the costs of every contract and order in the economy will return incredible income to businesses and change the way we trade. Saving injections of trillions can fuel global economic growth more than any government or corporation can do on their own.
The blockchain technology
Blockchain is basically a decentralized framework for tracking trustworthy transactions without intermediaries. That transaction is irrefutably linked and exchanged via a network of computers using the power of cryptography. Network computers verify contract terms instantly, functioning as instant accountants that “check the books” for no fees. Automatic transaction authentication is, therefore, the basic feature of blockchain technology.
What exactly is Bitcoin?
Bitcoin is an electronically owned digital currency, which is not tangible like fiat currency. Cryptographically it was developed and is, therefore, a cryptocurrency. The software runs on open source and is not owned by individuals. It is decentralized and is not regulated by governments or banks.
This is how Bitcoin-like cryptocurrencies function. There are a limited number of coins gained by solving or purchasing computer puzzles from others. Someone with a puzzle solution will prove that they own a coin, as their proof is registered in the underlying network of blockchains. Network participants check the identity and legitimacy of each other’s evidence in a cryptographically manner to ensure who owns which coins.