Like other currencies, cryptocurrency is also used in an ecosystem where it is accepted. For example, if you are in the US, the Dollar (USD) will be used as a payment instrument, while in Vietnam it will be Viet Nam Dong (VND). And in the Bitcoin ecosystem, BTC will be seen as a tool for exchange
Whereas with the fiat system, it is guaranteed by a government, circulated within that country and treated as legal tender. As for cryptocurrency, it is completely decentralized and no one can control it, so it will have the following advantages:
- Easily broken down to small units
- Easy audit
- Move easily
- Borderless and completely decentralized
- Can’t be faked
- No one has been able to hack or hack Bitcoin’s network yet
- Smarter and growing steadily with updates
The cryptocurrency is based on blockchain data technology - a huge public ledger listing all transactions validated by a globally connected computer system.
Cryptocurrencies are built on complex algorithms, which allow transactions to be made directly between senders and recipients without the need for control by governments, banks or financial institutions. while still ensuring the safety and accuracy of the transaction.
It can be said that the introduction of cryptocurrencies marked a historic turning point in the form of electronic payment.
Ecosystems in cryptocurrency are built on different blockchains. For example, BTC is stored and moved on the Bitcoin network, the same goes for ETH in the Ethereum network.
However, not every project builds its own network, but uses the existing network to develop. For example, the Aave project is built on Ethereum’s ERC20 network
Here are some of the dominant crypto ecosystems in 2021:
The biggest difference between the networks is the transaction fee and the transaction speed per second. You can see that Solana is one of the best ecosystems currently in terms of the two criteria above, which is also the reason for the outstanding performance of Solana this year.
Exchange, buy and sell goods
Currently, there are many big brands and stores that accept payments in cryptocurrency, not only Bitcoin but also Ethereum, Cardano, Solana, Dogecoin Shiba Inu and many other coins.
Invest and store as an asset
There are many people and organizations that see cryptocurrencies, especially Bitcoin, as an asset that can store value and fight inflation.
→ With the above two reasons, the crypto market is increasingly gaining a foothold and becoming an important part of the financial market. Moreover, it is affecting politics as well as for the first time a country - El Salvador - recognized Bitcoin as a legal currency.
Hopefully, through this article, you have had a simpler view of electronic money and its uses. Stay tuned for the next articles to better understand this market