Transactional properties of CryptoCurrency:
There are several transactional properties of cryptocurrency that are different from other e-currency systems that make it more popular than any other transactional system. Following are some properties to understand about cryptocurrency.
1.) Irreversible: After confirmation of a transaction in system, it can‘t be reversed by any means. Not a single person can do it. Whether it is your bank or the president of the United States. Even not Satoshi nor your miner. Nobody, it means that if you send money, you send it. After that Period. No one can help you to recover that amount back in your account. If you sent your funds to a scammer or if a hacker stole them from your computer. There is no safety net.
2.) Pseudonymous: This is another unique thing. Neither your transactions nor accounts are connected to real-world identities. You receive your Bitcoins on so-called bitcoin addresses, which randomly seems 30 characters of block chains. It is not necessarily possible to connect with the real world identity of users and their addresses while it is usually possible to analyze the transaction flow.
3.) Fast and global: Transaction are propagated nearly instantly in the network and are confirmed in a couple of minutes. But some networks may take up to 24 hours depends upon their system. Most of the networks do it within a few minutes. Some networks give options for your priority, if you want fast then you will have to pay more fee. Since this happens in a global network of computers, they are completely different from your physical location. It doesn‘t matter if I send Bitcoin to my neighbour or to someone far from my location, it can be USA, Afghanistan or any other place.
4.) Secure: This is very much secure. It’s funds are locked in a public key cryptography system. The owner of the private key can only send the cryptocurrency to another account or address. It is impossible to break this scheme while it is using strong cryptography and the magic of big numbers. A Bitcoin address is more secure than Fort Knox.
5.) Permissionless: There isn’t any permission required to use it. You don‘t have to ask anybody to use cryptocurrency wallet even if you are underage. It‘s just a software that everybody can download and use for free. After installation of software, you can receive and send Bitcoins or other cryptocurrencies. No one prevents you for the usage of it. There is no gatekeeper. No regulations are applied for it.
Monetary properties of Cryptocurrency:
1.) Controlled supply: Bitcoin has controlled supply. Most of the cryptocurrencies limit the supply of the tokens. If we see Bitcoin, the supply of tokens decreases in time and will reach its final number somewhere in around 2140. All cryptocurrencies control their supply of the tokens with schedule code in written. This means the monetary supply of a cryptocurrency in every given moment in the future can roughly be calculated today. There is no surprise.
2.) No debt but bearer: In financial terms, No debt but bearer. The Fiat-money on your bank account is created by debt. The numbers, that you see on your bank statement shows nothing but debts. It‘s a system of IOU. In cryptocurrencies there isn’t any debts. They just represent what they have. They are money as hard as coins of gold.
If you want to understand the revolutionary impact of cryptocurrencies, it is necessary to consider both properties. The cryptocurrency, such as Bitcoin is a permissionless, irreversible and pseudonymous. It means an attack on the control of banks and governments over the monetary transactions of their citizens. None of the person hinder someone to use Bitcoin. You can‘t restrict someone to accept a payment using bitcoin and you can‘t undo a transaction.
As money with a limited, controlled supply that is not changeable by a government, a bank or any other central institution, cryptocurrencies attack the scope of the monetary policy. They take away the control central banks take on inflation or deflation by manipulating the monetary supply.
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