What is an On-Ledger Currency?
Each cryptocurrency is also an on-ledger currency. This is because it is stored in a wallet. This can be either an online wallet, a software wallet on your own computer, or a hardware wallet.
This means that such digital currency does not exist in any physical form. Consequently, there are no coins or banknotes, only digital codes. Any state or private guarantees and assurances are excluded. There is also no equivalent in gold, as is customary for some national currencies, which eliminates all controls by private or cooperative banks.
Furthermore, no control measures by the state are possible, which does not in any way relieve tax liability. In case of ambiguity, the tax office should be consulted. Even if no direct control is exercised, every financial transaction is verifiable. Here too, the principle is that ignorance does not protect against punishment.
Security of On-Ledger Currencies
In principle, there is no total security for any currency and this is the case with digital currencies. A currency is generally considered safe as long as it is accepted. When comparing individual types of wallets, the online wallet is the most vulnerable and the hardware wallet is the safest.
With regard to the various cryptocurrencies, Bitcoin has the highest acceptance, followed by Ethereum. The development of hundreds of alternative digital currencies remains to be seen. For the time being, only easily-accessible money should be used.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.