The coming of the cryptocurrency is perceivedambiguous by different parts of society. Is it a future or just a big deceive as a MMM pyramid. What dangerous contain Bitcoin, Etheruem, Litecoin and other types of cryptocurrency? What does mean Bitcoin scalability problem? Is it a problem only for the owners of the online coins or it canhook everyone? Alternatively, it is going to be a great problem for whole world economy. These questions are appearing because of existing ignorance and the nature of the cryptocurrency. To make predictions it will be useful to discover the principles of work of the virtual currency in detail.
Innovations always brig a lot of uncertaintyand volatility to our lives. That is why sometimes it is difficult to understand such a phenomenon as Bitcoin or Ethereum. The same problems have been also in past. There have been passed a lot of time when in the end we have understood the internet influence on us. For more than 10 years ago, when internet just started to become a part of usual life, most people thought that it I just a toy for a wealthy corporations and businessmen. Today we cannot even imagine our life without it. If to delete internet from the everyday life – everything are going to stop. The same story have been with mobile phones with touch screens. At the begging it seemed to be also exclusive thing for the chosen ones – the price was really high. However, now I is difficult to find a person everywhere that did not used smartphone or something with touch screen. Also good example of the uncertainty in perspective technologies. Several years ago electrified cars or car with hydro engines were just a dreams of the developers. Time have made these innovations cheaper, and these car are now on the streets not only in Northern America and Europe, but also in the countries that do not belong to developed ones. As we can see, if the technology is really perspective and has a chance to become amass product – wait it in usual life in nearest time. Nevertheless, the best proof of this thesis – just remember your own life ten years ago and now. How much has been changed? Can you renovate your lifestyle of that time?
However, the spreading of the technologies does not happen by itself. There is an engine of this process. And this engine is called globalization. Because of it becomes a real possibility to sell American innovations in Vietnam or to build in Brasilia factures that belongs to Swedish companies. The international connections are getting stronger and the process of globalization will not stop in near future. That is why we need to get used with it. The principles of the politics and economy are changing. In addition, one of the problem that has appeared because of it is common currency. International trade are growing and the problem of exchanging of currency feels more painful. Great numbers of cost lost because of this.
In 2009 appeared first cryptocurrency that can solve this problem. The advantage of such thing as Bitcoin or Ethereum over usual currencies is their absence to the state. Anybody, who has an access to the internet and have enough powerful equipment, can mine coins. Such concept of working gives cryptocurrencies a chance to become international exchanging units.
However, there are problems with using them today. Cryptocurrencies are not legalized in any state. It means, that the price for any unit is not guaranteed by something. Anyone can be deceived and has no rights for the protection from the authorities. It is also because state does not like emission of units beside the official institutions.
Nevertheless, any step are going to be done to solve this problem. Other problem is about scalability of big virtual units. The most popular cryptocurrencies are limited in number because of security of them. In addition, the structures of coins is also limited in size – not more than 1 megabyte. The bigger number of users – the slower is the transactions. Security reasons gives no chances to increasethe size of coins. That is why such thing as Lightning Network is important step to make virtual units more effective.
What is the lightning network bitcoin? The Lightning Network consists of nodes and bidirectional payment channels. The payment channel is installed between the two nodes of the network. Each of the two nodes of the payment channel blocks a bit of funds for the Channel in Blockchain Bitcoin. In the future, the bandwidth of the channel will consist of the sum of funds blocked by the nodes.What channel is the lightning game on dish network depends on user. There is another program to scale coin Segwit, but it works in different way.
As you can see, common currency is notcloser to the reality. Cryptocurrencies need to develop more to make it real.