“Cryptocurrency” is the term given to an encrypted decentralised system that works around the world in digital form. This currency works using a technology called the blockchain which can be mined. While this may sound complicated, don’t worry; it is. The technology behind cryptocurrencies is wildly complex, but the results are clear.
Everyone has heard of Bitcoin and how people literally became billionaires overnight, and it’s true. It did happen. While mining for cryptocurrency can only really be completed by people with a lot of knowledge and know-how, as well as computer systems, expensive servers, and a lot of people working at the same time, cryptocurrencies can be traded and exchanged easily by everyday people like you and me.
The important thing to remember about cryptocurrencies is, unlike a bank, the currencies are unregulated by a central authority or financial institute, meaning they can be traded freely and easily.
Using Bitcoin as an example, and breaking this process down as simple as possible, all Bitcoin can be exchanged in two ways; through mining and by being bought or traded through a vendor. If you want to get involved with Bitcoin, buying from a vendor is the easiest way.
How you would do this yourself is to open a cryptocurrency wallet that supports Bitcoin (or your preferred currency) and then contact the vendor, buy however much you want, and the funds will be placed in said wallet. This transaction will then be written to the widely available blockchain using anonymous encrypted data which then verifies the transaction is real.
So, how does the Internet of Things affect cryptocurrencies, and what does the future look like for the two technologies that are growing closer together each and every day? Well, the most important thing to remember here is that, like all financial transactions, the process needs to be kept secure.
Points of Sales need to be maintained at all times, and the process for purchasing and trading, mostly with vendors, need to be optimised to be as fluid and as innovative as possible. The more people who are able to use the services, the more sustainably the currency can grow.
It doesn’t stop there. Already, IoT devices can be used to make purchases, such as buying food when the fridge is empty automatically, and you currently don’t need physical currency to make these transactions. It doesn’t take a lot to include cryptocurrencies in the available ways of making a transaction of this nature.
Of course, the thing to consider here is that small, individual screen devices are going to be affected by cryptocurrency integrations in many different ways compared with large-screen devices.
By this, I mean think about how cryptocurrencies can be easily traded and exchanged using mobiles and tablets on an individual basis similar to the ways I mentioned above. This is going to be far different from how organisations and big data companies will use these devices.
While it’s uncertain how this technology will shape in the future, especially since there’s a rise in AI and Machine Learning applications, we can be sure that big things are on the horizon in the way that cryptocurrencies will be integrated into our homes and societies as a whole.
Finally, as a quick mention, it’s important to think about how botnets are also changing the game. In cryptocurrency mining, hashing power is needed to mine. Basically, the bigger your computer and the bigger the processor, the more hashing power you’ll have to mine and the more units you’ll be able to acuminate. This can be achieved by botnets.
The more people mining a currency, the more value the currency has. While popular currencies like Bitcoin already require a huge amount of resource to mine, smaller currencies can be widely affected by the use of botnets who can easily mine a lot of currency which a relatively low amount of processing power.
This can change cryptocurrency values dramatically, and rather unsustainable, which can cause huge rises in values, and then send them plummeting just as quickly. This creates a huge amount of risk and an unstable cryptocurrency economy.
The concept of combining IoT and cryptocurrency is a wildly complex idea and what we’ve spoken about today is just the tip of the iceberg, especially when you start to include the laws and regulations around the world that are being bought into practice. All in all, it’s exciting to see where the industries will turn in the future.
Ashley Halsey is a professional cryptocurrency writer at Luckyassignments.com and Gumessays.com who has been involved in many projects throughout the country. Mother of two children, she enjoys traveling, reading and attending technology meetups around the world.