I've recently been exposed to the magical world of digital currency thanks to Mo Works' client CanYa. The Mo Works team partnered with CanYa to help create their ICO (initial coin offering) marketing launch, content creation, public relations and execution. It has been an incredible learning curb for the entire team who cannot stop talking about it! I sat down with our Crypto expert, Mitchell Torcello, to wrap my head around the concept and thought I could share it with you all.
What exactly is Cryptocurrency?
If you've heard anything about cryptocurrency, it's probably been about Bitcoin, which is, as it stands, the most famous. Bitcoin is an online digital currency built on blockchain technology. This technology gets rather intricate and is best explained by programming experts. All you need to know is that for each currency there is a limited amount of coins in supply of which can be traded for a real-world dollar value.
Each currency can be used as a system to bypass banks and other centralised payment systems. This is one of the perceived benefits of cryptocurrency: decentralisation. Cryptocurrencies similar to Bitcoin or Ethereum are intended to facilitate peer-to-peer transactions and empower people to have complete control over their money.
How does Cryptocurrency work?
We think back to basic economics when we come across cryptocurrency: supply and demand. Imagine, there are only 1 000 tickets to the AFL grand final, but 5 000 people want to purchase a ticket. Once the initial tickets have been sold, there is an undersupply and over demand, meaning tickets can be resold at a higher price.
Bitcoin prices were able to rise to such heights due to their high demand in such a short period of time. If the demand for Bitcoin continues (currently, we are at 1% adoption) then we can expect the value of Bitcoin to continue as an appreciating asset due to the finite number available.
What are the benefits of Cryptocurrency?
Besides the decentralisation and complete control over your own money, there are huge benefits for travellers. People are able to spend their digital coins on real-world goods and services, keeping them safe in your digital wallet and exchanging them for every country's currency, on the go. You are able to pair your cryptocurrency with a crypto debit card and convert into fiat value instantly, without the need for regulated payment systems. Anywhere, anytime.
How can we ensure the safety of Cryptocurrency?
Despite cryptocurrency being an online currency, the crypto coins can be kept safe in an offline wallet which operates similar to a USB. These offline wallets utilise a private key, which is essentially a password to access your coins. The private key is necessary as anything connected to the internet is prone to security breaches. Even with the development of state-of-the-art security and constant updates and adaptation to new threats, we need to be aware of risks.
Are digital currencies a threat to the future of cash?
A cashless society is already well on its way—banks have issued milestones to eliminate physical cash by 2020. There's no stopping it. You could question, will fiat currency (countries having their own individual currency) be at threat? According to our cryptocurrency extraordinaire Mitchell Torcello, Bitcoin will exist as a parallel currency, operating alongside Fiat currency systems as they currently support salaries, construction contracts and import/export industries.
Take what you will from the digital revolution of cryptocurrency—it's an intriguing space that has gained incredible traction in a short space of time.