Welcome to the money of the future: cryptocurrency. Simply put, cryptocurrency is a digital or virtual currency designed to work as a medium of exchange.
How Cryptocurrency Works
Cryptocurrency operates independently of a centralized bank with encryptions used to secure and verify transactions as well as to control the creation of new units. Encryptions are completed by people called miners. Only miners can confirm transactions by solving a cryptographic puzzle. They take transactions, mark them as legitimate and spread them across the network. The transactions are then instantly added to a transparent ledger, which is a public account and record of all transactions that ever happened within the network.
What is Blockchain Technology?
This ledger is known as Blockchain technology. With this ledger being public, everyone in the network can see every account’s balance. Each transaction is a file that consists of the sender and recipient’s public keys (wallet addresses) and the amount of coins transferred. Although Blockchain technology may appear complex, it is incredibly accurate and transparent.
Different Types of Cryptocurrency
Defined as a “peer-to-peer electronic cash system,” the very first cryptocurrency and best-known example is Bitcoin, which was invented and announced in 2008. Although Bitcoin may be the most well-known cryptocurrency, there are many others available and more being created every day.
Ethereum, or “ether tokens,” also underwritten by a Blockchain network, was launched in 2014 with an aim to pursue further decentralization. Ripple is another example of a cryptocurrency. Developed in 2012 it is considered by some industry experts to be bitcoin’s logical successor as it’s not just a currency but also a system through which any currency can be transferred or traded. Newer to the cryptocurrency scene, IOTA, with tagline “Next Generation Blockchain,” uses an alternative, distributive ledger system called Tangle.
Bitcoin and Blockchain Technology in Commercial Real Estate
As technology advances, people are looking to use other forms of currency as payment across many industries, and commercial real estate is one of them. Cryptocurrency and Blockchain technology could potentially play a huge role in commercial real estate as digital currency has already began being used as essentially a trade for property.
Even further, using a technology system like Blockchain to record the transactions of buying and selling real estate could be incredibly efficient and seamless, thus creating “smart contracts.” These smart contracts and a Blockchain style technology will significantly change the way we conduct transactions.