The world is becoming more advanced with the new technology and skill advancement. The money transaction has become extra convenient with the digital world. Traditionally, the users or the operator has to visit the banks or financial institutions directly and make the transactions by paying transaction fees. That is the tough process if someone wants to deposit or withdraw the currency.
The digital way of handling the financial transactions are very popular nowadays and for the investment purpose, it has emerged as a boon. The terms cryptocurrency has taken over the traditional financial market. It is growing rapidly day by day. There are two ways to make digital transactions. One is centralized currency and another is the decentralized way. Let’s understand both of the terms and find which would be more beneficial one.
Centralized currency is handled or operated by single company and CEO whereas decentralized is operated by anyone, there is nothing like one company or governmental institutions who handles that.
List of centralized currency
• Hub culture’s ven
• Local exchange trading systems (LETS)
• Community exchange systems
• google wallet
• Apple pay
List of Decentralized Currency
• Bitcoin cash
• Ripple monetary system
• Synereo AMP
• Waves platform
These are decentralized currencies transacted online vis blockchain system.
How is the Centralized currency is taken over by Decentralized currency?
Cryptocurrency is the result of 2008 financial crisis when traditional banking systems fails and originated the term called “Digital Currency”. This virtual currency attracts the interest f the investors and depositors. The first digital currency is “bitcoins” created by Satoshi Nakamoto. After bitcoin, there were a lot of cryptocurrencies has been created. Now they have reached the highest market capitalization and generates the high turnover. This is the best creation to make the transaction fast and easier. There is no intervention of any third party. The whole transaction is done online via “Blockchain”. These cryptocurrencies have very little or no control of central banks.
Decentralized currency is the boon to the failure of the traditional way of financial transactions. They are mined by miners and get rewarded for competing for mining process. The decentralized way is the fastest way to transact money, it will take two to three minutes for one transaction.
Comparison of centralized and decentralized currency:
The advantage of using decentralized currency is its “trust less nature”. Operators are not prerequisite to believe the security of the banks since the funds are detained by him in his personal wallet and not by a third person.
• The decentralized currency gives the operators the privacy. Operators are not obligatory to reveal their personal details to anyone, but if the exchange way contains bank transfers, in which the identity is exposed only to the person that is making transactions. Moreover, the holding of decentralized exchanges is dispersed through nodes so the risk of server downtime is not there.
• Decentralized exchanges are tremendously widespread for many reasons. Some decentralized platforms like Bitsquare need operators to be online in order for an order to be listed and for the transaction, demanding operators to make certain actions like indicating that a payment was received
Why decentralized cryptocurrency becoming more popular?
There is an enormous reason for the popularity of decentralized currency. Some are as follows:
• These currencies are safe as no intervention of the third party, anonymous and utterly decentralized in nature.
• These currencies are coded in very tough codes. They are coded differently for every transaction and these codes are not easily cracked. So there is no chance or very less chance of counterfeit.
• They are free from taxes like sales tax.
• If compare with the traditional way of transaction than the transaction fee is less in the decentralized method.
• Decentralized currencies deal worldwide so transactions can be made in any currency.
• These currencies are free from government and deal peer to peer transaction.
Decentralized currency is a peer to peer system and there is no central power to track all the transactions. They all are validated through the process called mining. Mining is finished by miners who are expert in this blockchain system. This process involves some difficult puzzle which has to be solved by the miner who gets the reward for that. Today these digital currencies have become famous worldwide and known to most of the people. This radical technology has the capability to convert the present payment systems that are measured sluggish, error-prone and costly comparative to act in other advanced industries.
The cryptocurrency market is presently valued around $19 billion. The implication of this system of digital cash can be unspoken by the hyperinflation situation in Venezuela, that has triggered thousands of people to practice bitcoin to pay for daily expenses and even medical conduct. The financial officials have been making fast growth in order to assimilate recent digital outflows schemes in their structure.
The digital currency is the future of money and the acceptance of this currency is inevitable. It is advanced in the traditional way of money transaction. The blockchain is very useful to avoid any error as they are decentralized in nature. Decentralized means no involvement of banks and financial institutions. Though factually, decentralization has a propensity to be amazingly incompetent compared to centralized one. So with the growing trend and competency, the decentralized have achieved more profit and more market value. Countries like Japan is promoting these cryptocurrencies very rigorously.
They accept most of the payment by these cryptocurrencies. Bitcoins has made a remarkable height with the highest growth and demand in the market. It is the most famous and demand currency in the market. It is the oldest and the very first virtual currency in the digital world. It is very safe and secure. It is created by miners by using hardware. These miners are expert and very experienced in this field. They dig and find the new currency as gold is mined.