Cryptocurrencies have been hailed as one of the next big things by experts in Technology and Finance industry. The popular Cryptocurrency – Bitcoin made the headlines recently when its value soared. It was also the form of payment the hackers behind “WannaCry” ransomware cyber attack demanded. We spoke with Jeffrey Osei a developer at Loggers inc. who threw more light in cryptocurrencies and bitcoin.
What is cryptocurrency?
Simply put, a digital asset designed to work as a medium of exchange using cryptography(encryption) to secure the transactions and to control the creation of additional units of the currency.
Can you give us a little history on the genesis of cryptocurrencies?
In the beginning dated in 1998, an electronic currency system which required users to complete a proof of work function(algorithm) with solutions being cryptographically put together and published was born called (Bit-Gold). Fast-tracking into the first decentralized cryptocurrency, bitcoin, was created in 2009 by pseudonymous developer Satoshi Nakamoto. It used SHA-256, a cryptographic hash function, as its proof-of-work scheme for doing the same calculations and publishing as its predecessor(Bit-Gold)…From there all the enthusiasm came alive.
What are the advantages of cryptocurrencies?
I’ll name three(3) of them:
Fraud: Cryptocurrencies are digital and cannot be counterfeited or reversed arbitrarily by the sender, as with credit card charge-backs.
Identity-Theft: Cryptocurrency use a “push” mechanism that allows the cryptocurrency holder to send exactly what he or she wants to the merchant or recipient with no further information, therefore reducing the risk of the stolen information by hackers.
Lower Fees: There aren’t usually transaction fees for cryptocurrency exchanges because the miners are compensated by the network(pools).
How does one acquire cryptocurrencies?
There are two steps involved basically
First of all before you can start trading in cryptos you need a WALLET (A cryptocurrency wallet is a secure digital wallet used to store, send, and receive digital currency like Bitcoin) and I personally use coin base to help me save all my virtual money and also to make transactions when I want to.
Secondly, to actually purchase any of the currencies such as (bitcoin, ether, dogecoin, litecoin etc.) just to mention a few. With the buying you can also buy any of the above currencies from either family or friends who have it, use the coin base trading marketplace to pay someone for what you want to buy or use a wonderful platform like local bitcoins or hex to purchase bitcoins if that’s what you are looking for.
What’s the relationship between block chain & bitcoin?
Simply put block chain is a public ledger ( a place for keeping the transaction records ) but the block chain is used in every cryptocurrency alive and bitcoin is just the currency for the trade. So see block chain as the Banks and bitcoin as the Ghana Cedi’s.
Can bitcoin replace the “regular” currencies we know?
Technically speaking “Yes” it is capable of replacing the regular currency if all factors are satisfied, most likely the adoption and trade acceptance by all the financial industries and their consumers but it’s not going to be easy because software can sometimes fail.
In what ways can Africa leverage on crypto currencies to advance developments.
Well my view on that would be based on the eradication of embezzling activities in the economy because if we can monitor all transactions wherever they are sourced to their endpoint then we can fish out all the “crooks” destroying the economy.
Do banks offer services in cryptocurrencies? if yes, which banks. if no why don’t they offer services in cryptocurrencies?
Well, to the best of my knowledge and research, most banks have been advised against physically or virtually trading in crypto-currencies, but a few financial heads have taken it upon themselves to setup virtual banks to help wallet owners do all their everyday “bank” transactions there. An example is Bitcoin Bank, but until we have a law that publicly binds all the banks I don’t think anyone should trade with any bank.
How profitable is the mining of cryptocurrencies?
Well if you a millionaire or billionaire you can literally get rich overnight but if you an average person then I advise you not to invest in the mining of crypto-currencies because the hardware for mining is very expensive due to their exposure and before you can mine a block and get paid is also going to be a challenge. Some of the currencies can earn you some money but your R.O.I (Return On Investment) can be achieved in years but if you are willing to wait that long then it is fine to start now.
How does one setup to be a miner?
In mining crypto-currencies there are two ways –
Cloud-Mining : This is basically you going to a platform like Genesis Mining and buying cloud computers that will mine and the company in question takes care of everything infrastructure-wise for you, it is the safest and easiest way out if you have the money to buy it all.
Private-Mining : This is the hard part where you buy all the hardware, space, alternative power etc. for mining and also scout online for a very viable and well paying mining pool for the currency you are aiming at. If you are just beginning, it is very challenging as to how to setup everything and most of the time you might mess it all up in an instant.
According to coinmarketcap.com, there are over 800 digital currencies, is there a body regulating these currencies?
Well apart from the top 5 of those which have gained a lot of community interest, financial attention and corporate trust, the rest is just for developers who want something specific and in this scope an example would be Gun coin ( Trade Points ).
Any other information on the subject matter that may be of interest to our readers.
What I will add is more of an announcement and that is, cryptocurrencies are a part of our everyday financial trade-offs to consider because it is something the future is going to invest and trade in a lot, so just getting to know a little bit more about it would not hurt because the Christian Bible advises that “Due to the lack of knowledge, my people perish” – if I got that right, so to end – the ball is in our court and whether we accept the future or not depends on our existence.