The World of Cryptocurrency-What is it?
Cryptocurrency is a type of virtual currency that uses cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain.
It is a form of digital money that isn’t centralized like fiat money and can be used to make purchases over the internet. It is becoming a quite popular way to transact business, day-to-day transactions, and even investments.
Businesses in the U.S.A. are increasing ways to accept cryptocurrencies and companies abroad are increasing their usage of digital assets to transact business investments and other operational purposes. So you shouldn’t be surprised if you see a bitcoin ATM around the corner of your place of business or home.
Popular cryptocurrencies that have a wide market are Bitcoin, Bitcoin Cash, Litecoin, Ethereum, and some others like EOS, Tezos, and ZCash. Using cryptocurrencies, aka crypto, allows you to buy online without a middleman such as a bank or a payment processor.
Well, you might be asking, what makes it so secure?
Since crypto is not issued or controlled by any government, it is generally managed by peer-to-peer computer networks running free open-source software that anyone can access. The key is that it uses sophisticated technology called blockchain to secure all transactions for a particular currency. Think of a blockchain as a balance sheet that is similar to what is used by a bank and each currency has its own blockchain or balance sheet or ledger.
As anyone can participate in a crypto blockchain it is also distributed across those that participate in the network, and it allows it to be free from control by any company, country, or third party. This technology is on the frontier of many big things and is able to make transactions seamless, private, transparent, and secure with the constant verification process of blockchain. It is a new way to think of cash and is totally digital with a rapid way to exchange value throughout the world.
Stay tuned to more articles on Cryptocurrencies and how the IRS treats them and those who file 1040s!
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