The world of publishing, communication and data sharing changed with the penetrative performance of mobile phones and the internet. Money, has never seen a transformative innovation similar to this. Credit cards have been in existence for far longer than the internet and hence, were never designed for the internet. Huge amounts of money are transacted on a daily basis over the internet using a medium that is neither safe nor was designed for the purpose. In fact, money itself was never designed for any of the purpose that it serves today.
Cryptography was born out of the need for secure communication in the Second World War. It has evolved in the digital era with elements of mathematical theory and computer science to become a way to secure communications, information and money online. The first cryptocurrency was bitcoin, which was created in 2009 and is still the best known. There has been a proliferation of cryptocurrencies in the past decade and there are now more than 1,000 available on the internet. It is a currency associated with the internet that uses cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers.
International money transfers, international money lending, export-import and most other modern day transactions did not exist when money took it’s current form, and for this exact reason transactional efficiency, security, privacy, cost and speed have taken a massive beating.
With digital currencies, Bitcoin and the other alts, most of the above problems, if not all, are completely solved. Digital currencies open us to the world of smart contracts, instant money transfers without any middlemen, a global market that transcends the concept of borders and time, immutable record keeping and a wide range of other innovations. The vehicle to carry out these functions happen to be the tokens which are otherwise called ‘digital currencies’. The fact that these tokens perform set functions give them a value and as the acceptance and usage increases, the value of these tokens also increase.
The preceding 8 years, right from the invention of Bitcoin to this moment, has seen the birth of over 1000 currencies, Bitcoin has grown by astronomical figures and continues to do so, ‘billion dollar’ companies have been created and cryptocurrencies are now regulated and taxed in many countries, led by the USA. One can only imagine the kind of impact these instruments will have on the world in the coming years.