A Cryptocurrency, as defined by Wikipedia, “is a virtual currency that is mathematically engineered using cryptography and mathematical algorithms in order to provide a degree of privacy and anonymity.” By definition, there are no physical coins that will be issued. A Cryptocurrency can only be “minted” using digitally generated keys, which are then stored in blockchains, the workings of which are still under debate and development. This is done so that even in the event of theft or destruction of the physical key generator, the trail of the encrypted key would still point to the owner’s private key, giving authorities with little to go on. The use of Cryptocurrencies as an investment vehicle however, has seen many people invest large sums of money into them with the hope of seeing large profits in the future.
However, the main attraction of investing in Cryptocurrency as an investor is its ability to allow for complete privacy of transactions along with its ability to quickly confirm and transmit information across vast distances. So, what is it that makes Cryptocurrency such an attractive investment? One of the most fundamental differences between investing in Cryptocurrency and investing in traditional stock investments is the method of confirmation of transactions. In traditional investments such as stocks and bonds, investors need to rely on the company issuing the stock certificate as proof of ownership, with any subsequent transactions going through a series of financial intermediaries such as broker dealers. With Cryptocurrency however, the proof of ownership is kept on a self-contained server and only requires that the owner/proof generator sign the appropriate forms.
The proof of ownership method for Cryptocurrencies allows for much more secure transactions than ever before. The inherent nature of the technology on which Cryptocurrencies work means that once a proof of ownership is created, the ownership is unproofed. As a result, investors who wish to transfer funds from one Cryptocurrency to another will instead see the transfer occurring with the cryptography enforcing the transfer as valid. However, once the desired new units are transferred, investors may be required to initiate the transaction again at which point the proof of ownership will no longer be needed.
One of the most attractive aspects of Cryptocurrency is that it is hosted on the Internet. This enables Cryptocurrency users to utilize their Cryptocurrency anywhere in the world where an Internet connection is available. This ease of use is particularly appealing to international investors who may wish to trade in Cryptocurrency but who also have to restrict their exposure to traditional markets. Because Cryptocurrencies are not issued by any governmental agencies or banks, there are no restrictions on the supply of these units and investors can spend them however they see fit. Therefore, any changes in the value of the currencies within a given day is not necessarily dramatic. For this reason, many investors are attracted to Cryptocurrency because it offers them freedom from governmental controls as well as the relative anonymity it provides.
Perhaps the best known and largest competitor of Cryptocurrency is the popular eether token. The reason for this is that the supply of eether is limited and is geared towards supply and demand. The supply of ether is even capped at 21 million. This has the effect of stabilizing the market and preventing extreme volatility in the value of these digital currencies. In addition, eether is traded over the Counter, meaning that every transaction is recorded in the block chain and cannot be easily identified individually.
There are several other competing currencies in the Cryptocurrency marketplace but two of the most prominent include ripple and litecoin. ripple is an open source protocol that allows its users to transfer money from one destination to another without the use of a third party intermediary like PayPal or Google checkout. Litecoin is the first modern Cryptocurrency to introduce a payment network that makes use of the ripple protocol. Both of these currencies are traded on major exchanges, though their relative strengths lie in their different payment networks as compared toryptocurrency.
Distributed ledger transactions are one of the driving forces behind the growth of Cryptocurrency. Through this type of transaction, investors and traders can ensure their privacy by controlling the distribution of their transactional data. This ensures that the currencies being traded are being conducted with complete trust in the underlying cryptographic proof that the transactions are fair and not based on fabricated information. With this in mind, it becomes evident that a well-established Cryptocurrency can only survive if it has a solid payment system to attract investors and customers. Therefore, it is imperative that the developers of any Cryptocurrency take great care to create a strong and liquid payment system to bolster the stability and profitability of their Cryptocurrency.
One such payment system that has been developed by Cryptocurrency smart contract creators is eToro’s own ADA smart contract token. This project is referred to as ADA tokens, which stands for Ademptable Asset Exchange Trading tokens. These smart contracts allow users to exchange traditional metals like gold and silver with a wide range of digital currencies including ether, ripple, and litecoin. Through this innovation, investors are able to convert their tangible assets into instantly available and flexibleICO tokens through a process that is completely transparent and safe. Through a combination of factors such as: