It was announced earlier on this week that fast food supremo Burger King has launched its own crypto-currency in Russia. WhopperCoin, aptly named after the brand’s famous Whopper burger, is a new Blockchain loyalty program which will allow customers to claim a coin for every rouble (1.3p) they spend on the Whopper sandwich. However, this isn’t the first cryptocurrency bounding onto the mass market. From the world famous Bitcoin and Ethereum, to the ridiculous Dogecoin (based on the “Doge” internet meme) and Titcoin (don’t ask) – Blockchain, cryptocurrency and digital currency are all phrases you may have be hearing more frequently in your daily lives.
But what actually is this invisible money that EVERYONE is talking about?
Before going into detail on cryptocurrency and its pros and cons, it’s best to outline where this tech actually comes from – a fact that often confuses a lot of folk. All digital currency is hosted on a software platform called Blockchain. Put simply, Blockchain technology allows consumers and suppliers to connect directly, removing the need for a third party. By using a type of cryptography (writing or solving codes) to keep all exchanges secure, Blockchain provides a digital ledger of transactions that everyone on the platform can see. Basically it means that a chain of computers must all approve an exchange before it can be verified and recorded. Via Blockchain technology you can share a whole host of things asides from money, including records and other digital assets, all in a secure and tamper-proof way.
So now onto cryptocurrency. A cryptocurrency is effectively digital cash shared over Blockchain, independent of any central bank. As mentioned, Bitcoin is the most famous digital currency. The company prides itself on being an “open-source” with “its design is public, nobody owns or controls Bitcoin and everyone can take part,” and with a reported 14 million Bitcoin wallets in active use and an overall market capitalisation of above $170 billion, it’s most certainly taken off.
So what are the pros and cons to this new tech? The main issue currently with mass audiences not using cryptocurrency is the lack of understanding, this in turn inevitably causes a level of mistrust. Few people truly comprehend how these types of digital transactions work, and without widespread education, there will never be a widespread adoption. Another huge issue with digital money is that, unlike banks which have it covered in case of a security issue such as a stolen credit card, these digital currencies are not retrievable if they’re lost, due to the fact that the currency is encrypted itself for security purposes. So when you’re money is lost with digital currency, you ain’t getting a penny back. However, of course, it’s not all doom and gloom with crypto cash. Positives of using an open ledger include the transparency of transactions, as all are recorded and monitored, with the inability to be changed. This is a huge security benefit. Another big security plus is that with a digital currency, the user is in control of their own transactions, by removing the middle man, this greatly improves the protection of users from identity theft.
There are many positives and negatives when it comes to this type of innovative tech, the most important thing that you must remember, is that this process exchanges money in a very different to normal banking transactions, however this is not necessarily a negative… or a positive! In my opinion, how you see yourself using cryptocurrency, is how I would advise you to invest in it. Digital currency is not to be used for your everyday transactions, such as the coffee on the way to work or the bus back home. However with the price of Bitcoin for example continuing to sky rocket, investing in digital currency, which isn’t hit by inflation, could be a very smart move.
I’d love to know your thoughts on crypto-currency! Do you see it in your future?