To start with Crypto currencies back in the history, the very first crypto currency transaction can be traced back to 1998. However, it was not until 2008, a decade later that the actual trading and value of crypto currency took off. The coding and the mining process is what brings value to the crypto currencies that change hands. A decentralized process and the fact that it gives certain autonomy to the investor from the highs and lows of the market are major reasons for the favor garnered for crypto currency. Before going into detail about the crypto currency cloud and the ways in which it affects the economy in real time, let us first have a short introduction to mining and then cloud mining.
Mining in Crypto currency
Mining is the one of the ways in which a lot of people made a fortune back when bitcoin was first made. Mining is essentially the process that keeps the block chain alive. Miners are the people who approve and facilitate the transactions between two users. You will need a huge amount of technology to back your mining if you are doing it for gaining bitcoins. One of the fundamental concepts that binds crypto currency is that there is only a limited amount in the entire world.
Miners mine because they are paid in fractions of cryptocurrency. Likewise, the more crypto currency spreads in the world, the more miners are involved and the payment to each individual miner falls by a fraction. This has now escalated to a point where the money spent to get enough power for mining was not worth the reward you receive. This has brought about the need for a way to mine without spending these massive amounts of power behind it. Thus we introduce the concept of cloud mining.
Miners are in fact the crux of Crypto currency. Every other attempt to make cryptocurrency failed because of the imbalance of power that was given to the miner. However, the decentralized method of mining in block chain helps restore an equal balance. The miners are all a form of a bigger network of computers and cannot mess with the rules of the transactions that have been set.Going into scientific terminology, crypto currencies have seen a boom due to block chain because it is based on the concept of “Nash Equilibrium” and Game theory.
Here let us take a look at what cloud mining is and how crypto currency has affected our economy.
What Is Bitcoin Cloud Mining
Humans have always found ways to simplify any process that they come across. The major hurdles to simplifying the process of mining was the sheer amount of computational power that was needed to support it. Finding a way around it, people have developed cloud mining, which utilizes the power from a remote source through a shared network. This means that all you need is a computer for communicating with this cloud and you are good to go, to start mining.
The process works for all bitcoin wallets that are at your expense. You get amazing benefits in terms of the expenses saved in acquiring and maintaining the mining equipment. You also save in electricity usage and are left with ample amount of space which would otherwise have been taken up by equipment.
Cryptocurrency And Economics
According to data collected by Cambridge University during one of their numerous surveys there are about 5.8 million users of cryptocurrency as of now. Most of them are active users of Bitcoin. Economists have been forever divided on the stand they take regarding cryptocurrencies. Some of them support the growth and reliability of cryptocurrencies while others remain skeptical, much like the general population.
Similarly the end of the era of cryptocurrency has also been predicted many times by analysts and economists. The main appeal of this digital currency is that in most cases, once the rules have been set not even the users can change them. A sort of automated system of payment becomes implemented, which also gives the users high levels of anonymity. This trust in transaction is the major reason why people still prefer the use of cryptocurrency over paper money.
Let us take a quick look at five very active ways in which the digital world of cryptocurrency is crawling up into real economy.
1. A shift in power.
Before the entry of cryptocurrency into the banking scenario, the power of money transactions and its information rested with governments and central banks. They were the sole point at which all this data was collated. With every new user in the premise of cryptocurrency one user is removed from the list of these governments and banks. As we all know, in today’s scenario, information is power and we can see a very visible shift of the same to the masses from these governing bodies.
The autonomy thus offered has both extensively good and bad effects; however, it is safe to say that the fate of economy is now not resting solely on the shoulders of banks and governments.
2. Hike in Illegal activities.
One of the most alarming uses of cryptocurrency is to carry out illegal transactions at the hands of politicians and even civilians to avail services from the so called dark web. The provision that crypto currency offers to users to remain anonymous is being utilized by some people to make untraceable transactions of black money.
3. Budding of new markets
Cryptocurrency is the avenue based on which multiple new markets which are highly volatile have emerged. They are controlled only by the cyberspace and gives validation to no other government body. The minimal transaction cost and maintenance of anonymity makes crypto transactions more appealing than transactions by the more traceable paper money.
4. Uncertainty
Cryptocurrency is also highly uncertain in terms of the rise and fall of their value. This uncertainty also means that any day the price can crash and the entire economy built on this can come crashing down. This issue however, is now being combated by government backed cryptocurrencies like GBC.
5. Growth of the dark web
The dark web thrives under crypto currency transactions as this has made an exchange of goods very smooth and hassle free. This expansion also means that a lot of things that usually affected our economy is now taken out of the game entirely.
Long term effects of cryptocurrency on our economy are yet to be seen, but economists all around the world now agree that digital money has become big enough to be an actual deciding factor in the way our economy will behave in the future.
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