Increasing use of internet has created a requirement of low cost, rapid and anonymous transaction, which can be used for online exchange, as result fast settling money have emerged in the market. In last few years e-money was fulfilling this gap, but two new types of money came in to lime light. Crypto currency was the first one. Whose goal was to eliminate the requirement of financial brokers by presenting direct person-to-person online payments.

BTC/USD per Month/Year Prices

Introduction

Cryptocurrency has revolutionized the digital transaction and value of asses across the globe. Instead of trusting bank as intermediary to transfer money from a sender to a receiver, cryptocurrency follows a very clear decentralized system and provides dis-intermediated system in which chain or network of people that do not necessarily have similar goals or even trust each other, can keep the records of the transaction between them. Some of the protocols that have designed for this purpose has desirable features such as increasing the complexity for an attacker to maliciously inject or delete transactions inside the ledger from creating path to compromise the centralized trusted nodes, to the requirement of compromising a large group of peers or the computing power in the network. Another major feature is that the ledger replicated fully across a large subset of the peer group in the network. The transaction recorded ledger remains in persistent manner without any interference. 

Espousal of Cryptocurrency 

Use of cryptocurrency has significantly grown since advent of bitcoin. Total market for bitcoin was estimated to be USD 3.5 billion in 2015. Bitcoin especially has experienced a high degree of unpredictability since its inception, but the use of bitcoin is on the increase with number of bitcoin was around 13 billion by the end of 2015. In the last quarter of 2014, daily bitcoin transaction was more 110 thousand for the first time. The acceptance of this technology was also seen in retailers. Large number of retailers has started to accept cryptocurrency as payment alternative. 

Blockchain Smart Contracts 

 One of the most promising applications of blockchain technology is the smart contract. It can execute commercial transactions and agreements automatically. It also enforces the obligations of all parties in a contract, without the added expense of a middleman.

Imagine representatives coming to power with blockchain smart contracts. They wouldn't get paid unless they do what was promised by them. Funds won’t get allocated unless they propose what was originally drafted in the contract. People could have a world of active citizenship and accountable government that acts on behalf of the people, rather than the miss-lead interests.

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Reduction in Transaction Costs

There are four transaction costs of doing business as a firm or corporation, which prevents everyone from operating as independent contractors – the cost of search in an open market, the cost of coordination, the cost of contracting and the cost of establishing trust.

Cryptocurrency technology will radically drop all four categories of transaction costs. Talent can be acquired not just within the corporation but globally. And this will lead to radical new models of the firm. Tradition industrial age corporation structure is anticipated to witness substantial change in the way it operates.

Transparency

Transparency means something that cannot be changed or manipulated over time. Thus, in the context of cryptocurrency, once data (transaction’s information) has been written on a blockchain, it enters in the distributed ledger, and there can be no alterations, not even by the system administrator.

The transacted data is sent to all the users, thereby creating transparency. If someone wants to tamper with the transaction, he/she would have to change the ledger in every users’ database, which is practically impossible. Also, there is a time stamp on every transaction which is fed to the blockchain, which provides the benefit of audit. The recipient can prove that his/her data hasn’t been altered. These benefits are extremely useful for databases consisting information regarding financial transactions.