Cryptocurrency – Banking of the future. Cryptocurrency is a digital or virtual currency that uses cryptography (Cryptography, or cryptology, is the practice and study of hiding information for security.) and cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

The first of cryptocurrency born was Bitcoin. This was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto and it is reported that as of September 2015, there were some 14.6 million or more bitcoins in circulation with a total market value of $3.4 billion.

Since Bitcoin’s success, there has been a number of competing cryptocurrencies, such as Litecoin, Namecoin and PPCoin to name a few. Cryptocurrencies make it easier to transfer funds between two parties in a transaction; these transfers are facilitated through the use of public and private keys for security purposes. These fund transfers are done with minimal processing fees, allowing users to avoid the steep fees charged by most banks and financial institutions for wire transfers.

Cryptocurrencies are virtual and do not have a central repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of the holdings does not exist. Since prices are based on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely.

In Bitcoin’s short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value and this is obviously a concern.