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Properties Of Cryptocurrencies
Now let us discuss the properties of cryptocurrencies that will help us to gain a better understanding. The main features of cryptocurrencies:
- Pseudonymous: Cryptocurrencies are completely anonymous. You don’t know who you receive it from and who you send it to. The senders and receivers are identified by a 30 character number and have no connection with their real-world identity.
- Fast transaction: The transactions are carried out within just a couple of minutes and take place on a global network. Since they use state-of-the-art technology, the transactions can take place anytime, anywhere.
- Irreversible: Cryptocurrency transactions are irreversible, which means once a transaction has been confirmed, it cannot be reversed. Once the money has been sent, it has been sent. While this can be advantageous for the person who receives the money, this property makes it susceptible to scams and hacking.
- Secure: The above feature may lead you to think that cryptocurrencies are not secured. Well, that’s not true. Only the owner of a cryptocurrency knows the private key (like a password, similar to an ATM PIN) and can send it to someone else. A private key gives you the ability to prove ownership or spend the funds associated with your public address. These private keys are big numbers (13 digits) and are almost impossible to hack.
Are you wondering then what were the scams and hacking we were talking about earlier? We have discussed it in the later section of this module.
- Easy to use: Using cryptocurrencies is completely hasslefree. There’s no bank account opening, document uploading, using some payment gateway etc. with cryptocurrencies. All you need to do is download a software for free and install it and you can receive and send cryptocurrencies. No one can stop you.
- Impossible to counterfeit: One of the main reasons why cryptocurrencies are so popular is because they are impossible to counterfeit, thanks to the blockchain technology.
- Counters inflation: All countries in the world have centralized governments where the economy and money control are managed by the government. An individual has no option but to follow the rule of the land. Hence, if a government prints more money and causes inflation, the common people have to bear the brunt. Cryptocurrencies are a good alternative since they do not fall under the purview of any centralized government. They are a good tool to fight inflation.
