Properties Of Cryptocurrencies
Cryptocurrencies such as Bitcoin have several different features or properties which differentiate them from the cash which you use in your everyday life. In fact, using cryptocurrencies like Bitcoin is shown to be very safe, secure, instantaneous, and more. The properties of crytpocurrencies are unique to this type of digital money, all of which are very beneficial to anyone using them. Let’s take a few minutes to discuss these various properties and what distinguishes this type of digital currency from others out there. The properties of cryptocurrencies are unique so it’s worth taking a bit of time to figure out what they are!
The Transactional Properties Of Cryptocurrencies
Cryptocurrencies have several transactional properties in common. In other words, the spending and receiving of currencies like Bitcoin all have various things in common, so let’s take a look at those transactional properties of cryptocurrencies right now.
Free Of Permission – Everybody can download the necessary software to mine, trade, and purchase things with cryptocurrencies. You do not need permission from anybody such as a bank or government to do so. Literally anybody can do this without permission from anybody else. There is no gatekeeper and nobody can prevent you from engaging in mining, trading, or the spending of cryptocurrencies.
Irreversible – Once you have sent money, the transaction is 100% irreversible. There is nobody on the face of planet earth that has the authority to reverse these transactions. It goes even further than that because nobody has the ability to do so either. Once you have sent the money, nobody including yourself, Satoshi Nakamoto, the POTUS, or anyone else can reverse the transaction. Once the money is sent, the transaction is totally irreversible in every way imaginable.
Highly Secure – Cryptocurrencies are governed by a security system known as cryptography. In layman’s terms, this means that each block, the ledger, transactions, and your private stash of crypto-funds are all guarded by highly sophisticated encryption techniques. You can only view your own cryptocurrency holdings with a specific key or cipher. Also, once you send the cryptocurrency, such as a Bitcoin, to someone else, they can only receive it and deposit it into their account if they have the corresponding key or cipher. This means that anybody without the proper decryption cipher cannot view, send, or receive funds.
Instantaneous – Another highly valuable property of the modern cryptocurrency is that transfers happen immediately. This is unlike banking transactions or credit card transactions which can sometimes take up to several days to complete. It does not matter what your physical location is, as long as you have a computer and the necessary software. Transfers happen instantaneously, which is a big bonus for many people.
Anonymity – The final important property of cryptocurrency is that they are totally anonymous and operate under the guise of pseudonyms. Cryptocurrency transactions and accounts are not linked to real world identities. Currencies such as Bitcoin and Ethereum are sent from and to addresses, not the names of people. Therefore, cryptocurrencies are totally anonymous and people will never know who is spending or sending them.
Monetary Properties Of Cryptocurrencies
Cryptocurrencies, beside having specific transactional properties, also have a couple of specific monetary properties that set them apart from other forms of currency, such as your official national currency. Let’s take a quick look at these monetary properties of cryptocurrencies right now.
No Debt – Cryptocurrencies are not created or monitored by any kind of centralized governing body and they are not seen as debt. The fiat money you have in your bank account is created by debt, almost like you have a piece of paper saying that it is worth this amount of money and can at any time be redeemed for that specific amount. Now, while Bitcoins and other such cryptocurrencies are digital and not physical, they are as real as gold or silver. If you have 5 Bitcoins in your account, those are 5 solid Bitcoins that you have without question.
A Controlled Supply – The other neat monetary property of cryptocurrencies is that they have a very specifically controlled supply. Cryptocurrencies like Bitcoin limit the supply of tokens that are available. In fact, Bitcoin itself was created so that the supply of tokens will run out by the year 2140. Unlike with physical cash where you can technically just keep printing more and more of it, the supply of cryptocurrencies is limited. This means that you can actually calculate the total amount of Bitcoins in circulation for any given future date at any given time.