Cryptocurrency: Next Level in the Evolution of Money

Currency system has been constantly evolving since the concept of money has been introduced. In this age of information technology, the next level in the currency system is digital currency, popularised since the last few years by its main sub-type, the cryptocurrency. Cryptocurrencies are open-source algorithms which can be programmed by anyone and facilitates peer-to-peer financial networking without the need for third party arbitration, thereby reducing the dependency on banking system. This creates an open system which has tremendous economic potential in increasingly digitalised and globalised world. However cryptocurrency is not without its weaknesses, such as digital security, market regulation and speculative attacks among others.

This paper traces the origin of cryptocurrency, how it developed over time, how it works and the scope of cryptocurrency in today's ever expanding world of online transactions. It also discusses major issues and challenges confronting cryptocurrencies and proposes some ways on how it could be tackled.