Today, more than ever, cryptocurrency is becoming a viable option for consumers.
Why? Two reasons.
1) Cryptocurrencies function on complex and secure blockchain technology.
2) Cryptocurrencies are decentralized with no middlemen handling your money.
What’s blockchain technology?
Think of blockchain technology as a literal building block attached to a chain.
A great breakdown comes from Investopedia.
When you buy, hold, or exchange cryptocurrency, each of your transactions is stored as a “block” or piece of digital information. The block is then shared with the “chain” or database of publicly shared information.
Once a “block” has been added to the chain, it’s very difficult to go back and alter the contents of the block. If a hacker wanted to access your cryptocurrency, he or she would need to alter every piece of the digital blockchain - making this hacking nearly impossible.
PAYMYNT Financial operates on hybrid blockchain technology. Our PAYMYNT mobile wallet system is built on the Stellar Network. This means, using advanced blockchain technology, your PAYMYNT digital wallet is safe and secure.
What's the Stellar Network?
Like most popular technology, blockchain technology comes in many forms.
Currently, there are at least four types of blockchain networks:
- Public blockchains
- Private blockchains
- Consortium blockchains
- Hybrid blockchains
The Stellar Network operates with open-sourced, public blockchain technology. This means The Stellar Network was designed so that all the world’s financial systems could participate; Dollars, Euros, Pesos, etc.
Visit the Blockchain Council for an excellent breakdown of the difference between public vs. private blockchain technology.
“A public blockchain is an open network. Anyone can download the protocol and read, write, or participate in the network. Bitcoin and Ethereum are well-known examples of a public blockchain. A private blockchain is a permissioned blockchain. Private blockchains work based on access controls which restrict the people who can participate in the network. Hyperledger Fabric of Linux Foundation is a perfect example of a private blockchain.”
Is the Stellar Network secure?
Fortunately, when it comes to open-sourced, public blockchain technology, there are several public standards in place. The Stellar Network uses industry-standard public-key cryptography. This means the Stellar Network code is well tested against potential hackers.
"Think of public-key cryptography as a private door at a public museum. The museum keeps a secure key to the public door. Only the secure key can lock and unlock the door. Similarly, public-key cryptography uses a pair of keys to encrypt and decrypt data to protect it against unauthorized access or use."
To read more about the stellar network and data security visit: Stellar.org
How are cryptocurrencies decentralized?
The decentralization of blockchain technology is another reason why cryptocurrency is a viable option for consumer spending. To understand how cryptocurrencies are decentralized, one must first understand the concept of distributed ledgers.
A distributed ledger is a database that is consensually shared and synchronized across multiple websites, institutions, or geographies and is accessible by multiple people. Distributed ledgers allow transactions to have public "witnesses" and do not require a central party or middle man to verify a monetary action.
Cryptocurrencies operate on blockchain technology, a type of distributed ledger.
An excellent explanation of distributed ledgers comes from Tradeix,
“A distributed ledger is decentralized to eliminate the need for a central authority or intermediary to process, validate, or authenticate transactions. Enterprises use distributed ledger technology to process, validate or authenticate transactions or other types of data exchanges.”
The Stellar Network operates on an open-sourced, decentralized, public blockchain. This means no middlemen are handling your money. Anyone can participate and no central authority dictates whose approval is required for consensus.
No middlemen = fewer transactional fees
No middlemen = stronger cybersecurity
The Stellar Network protects your information and privacy through a decentralized and distributed structure. Hacking is nearly impossible. Your data remains yours.
As the digital world progresses, decentralized money remains a key area of focus in the fintech industry. Currently, there are over 6,000 different cryptocurrencies on the market and several, major currency exchanges. To learn more about MYNTs, decentralized finance, and stablecoins visit our post "MYNTs & Etymology of Money."
Are you ready for the next generation of digital money?
*Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Paymynt Financial is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.