guest post, Guest posts do not necessarily reflect the opinion of the editors.
08/01/2022, 3755 characters
Cryptocurrencies are an integral part of today’s financial world. Within a few years, digital currencies have gained immense importance. Since the emergence of the first cryptocurrency Bitcoin in 2009, countless other currencies based on the blockchain principle have been added in just over ten years. Cryptocurrencies have now made it into the mainstream and are simply a part of it today. But what actually lies behind the term and what does it mean? We took a closer look at digital currencies.
Where are cryptocurrencies used?
While cryptocurrencies initially functioned primarily as a digital means of payment on the Internet or the dark web, they have now entered the real world as well. Many online portals, delivery services or casinos offer the possibility to pay with cryptocurrencies from eWallet. But Bitcoin, Ether and Co. have also become indispensable in the financial world. For many financial experts, cryptocurrency trading is the future of finance. Although most cryptocurrencies are still affected by high price fluctuations, high risk also promises high returns. For this reason, it is all the more important that more emphasis is placed on the topic of cryptocurrencies, both in universities and in other educational institutions. The University of Cincinnati, for example, already offers its students two courses on this subject. Among other things, a “crypto-economic laboratory” is to be set up on the university campus, where the influence of cryptos on the economy will be investigated. Last but not least, UC was influenced by elite universities such as Stanford and MIT.
How do cryptocurrencies work?
When talking about the possibilities of cryptocurrencies, one should at least understand how they work. Common to most cryptocurrencies is the blockchain principle. Blockchain can be thought of as a chain of records that stores information about past transactions. Each block, i.e. data set in the blockchain, is marked or secured with a cryptographic hash value. Each value thus relates to its predecessor in the chain, which contributes to the security of this concept against forgery. Blockchains can be expanded through so-called mining, solving certain computer processes. To avoid excessive generation of new Bitcoins, ie. possible inflation, these arithmetic puzzles become more and more complicated. This requires enormous computing power and energy. The following applies: The higher the course, the more people want to make money from it, which increases the number of participating high-performance computers and the associated energy consumption.
What are the benefits of cryptocurrencies?
The security of the blockchain is also one of the great advantages of cryptocurrencies. Due to their transparency and mutual reference, the transactions are almost tamper-proof. In addition, many experts consider cryptocurrencies to be a serious alternative to traditional finance. The financial crisis and the stock market crash of the early 2010s have shown how fragile international finance is. According to this, blockchain technology could lead the financial world into a new era.
What is certain is that cryptocurrencies have experienced a real boom in the past ten years. Starting with Bitcoin, there are now thousands of digital currencies. Since they are also becoming more and more important in the real world, “cryptography education” is so important.
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