You may have been hearing a lot about crypto currency lately. No matter what happens in the future, the rising popularity of this exciting new form of money will only continue to grow. Even if you think you don’t understand it yet, you are going to be totally surprised at how easy it is to get involved.
There are so many differences between traditional forms of money and crypto currency that it is often difficult to realize they exist. While both have the same basic idea: You make transactions with people that you do not personally know or trust, but which you trust the value of the products you are purchasing.
This means that the value of both products is subject to some degree of random fluctuation, and each transaction can end up being worth more or less than any of the other transaction that is taking place. The difference is that the purchase of products with the use of fiat currency involves a third party, such as a bank, that has agreed to accept it as payment. When you transact in crypto currency, however, the funds are “sealed” in a secret code, which makes tracking the value extremely difficult.
If a third party is involved, such as a bank, then the risk of loss is lower because the money is usually guaranteed by the banks’ interest in keeping their reputation intact. But when you purchase products with the use of crypto currency, there is no need for third parties.
All transactions occur over the internet using a special kind of program called a “smart contract”. This enables you to make a transaction without having to wait for a single business day to get the money to your account, nor without having to wait for the value of the product to reach its “settlement value.” If the exchange was a good one, then the money would be transferred to your account on the date that you wanted it to be transferred to you.
Example transactions are easy to come by. Let’s say that I want to purchase items with the use of digital currency, and let’s say that the value of these items have just increased by 20%. You can easily buy the items with crypto currency right now, and when the value increases, you will get paid for them.
If the value drops, however, you will still get paid, because you have recorded the transaction in a smart contract that is recorded in the blockchain, and that will become part of the blockchain itself. You will receive the money instantly and not even have to go through a financial institution, like a bank, in order to receive it. It really is simple.