Your Straight Talk on What Crypto is, How To Use It, & What You Need To Know
Cryptocurrency is a fairly new technology, and we are only just getting our heads around it. What is cryptocurrency? Why do you need it? Is it the future of money or just one big Ponzi scheme?
Let us answer some of those questions.
Cryptocurrency is a relatively new type of money. A lot of people don’t know much about cryptocurrency and its history. With all of the scams in the crypto world, it comes as no surprise that many myths and misconceptions are circulating throughout the community.
There are all sorts of things that we need to talk about when it comes to cryptocurrencies. For one thing, we need to understand the basics of what cryptocurrency is and how it works.
Here’s a quick rundown on this fascinating currency.
Demystifying The Main Concepts Of Cryptocurrency In Plain English
Cryptocurrency is the world’s most famous and biggest digital currency, which is mainly used on the “world wide web”. It is considered to be a digital coin that allows you to purchase goods and services directly from the source, without any middlemen such as banks or credit card companies.
Cryptocurrencies are called digital coins as they are not actual coins.
It is a form of digital asset, or medium of exchange utilized by a large community of users or traders throughout the world.
A cryptocurrency can be transferred between different users, securely and inexpensively, using the technology of peer-to-peer transfer. It can also be used as an investment and small businesses can operate on it.
It frees people from having to deal with banks, governments and other intermediaries, which makes it safer since you don’t need to trust anyone to make a transaction.
The main goal of cryptocurrency was to build a better payment system and it does so perfectly.
Now let us get a bit technical
The name cryptocurrency is derived from the word cryptogram, which means an encrypted message.
It is supported by encryption that cannot be hacked, unlike fiat currencies.
Cryptocurrencies are virtual wallets that store your money in secure systems.
A cryptocurrency wallet is a program that stores private and public keys and interacts with various blockchain assets.
Cryptocurrency is a (1) decentralised electronic digital currency that uses (2) cryptography and (3) blockchain technology.
(1) Decentralised means, Cryptocurrencies are created, distributed and managed without any central authority, such as a central bank, hence it is not regulated or supervised by any government.
It does not require a third party to verify your transaction like a bank or credit card company
(2) It is created, stored and transacted by the use of cryptography. The currency units are produced by a process called mining. This occurs when users solve complex mathematical problems.
(3) Blockchain is the technology that drives cryptocurrencies and blockchain-based apps.
The Basics of Blockchain
Blockchain is an innovative way of creating a digital currency. The technology has paved the way for many businesses that are looking to adopt crypto for their needs.
A block is the smallest unit of data in a blockchain, called a “block”. Blocks are appended to the blockchain in a linear, sequential format and represent an encrypted version of records from one or more organizations. It makes sure transactions cannot be tampered with or reversed by anyone.
Cryptocurrency is Different From Everything Else
Cryptocurrencies are different from stocks and bonds because the companies and individuals who make them don’t even have to demonstrate that they exist. Instead, these digital tokens are encrypted, or “mined” using computers to generate coins that can be traded online between users.
Cryptocurrency has made it possible to buy things in real life, without waiting for days or weeks, and without having to engage in currency exchange clearance with bank accounts.
It has become very popular amongst those who want to store their money online, as well as for investors who are looking for an alternative form of investment.
The current market capitalization of all cryptocurrencies is around 1 trillion dollars at the time of writing.
There are several coins in circulation. The most known and widely referred to cryptocurrency is Bitcoin!
Bitcoin the First Born of Cryptocurrency
Bitcoin was the first cryptocurrency, invented by an anonymous programmer, or “Bitcoin user” under the pseudonym “Satoshi Nakamoto”. The system is designed to initially achieve a maximum of 21 million Bitcoins.
Bitcoin was ideally created to form an alternative payment system; however, people rarely use it for buying goods, but more as a means of investing. Its widespread adoption isn’t overly been used for the intended purpose it was created for.
People can trade Bitcoins freely and make a profit out of them, by buying and selling them at a higher price later. That is where the hype about cryptocurrency comes from.
Bitcoin is not technically backed by anything; only by the complicated mathematics underlying its blockchain technology, and the fact that only 21 million bitcoins will exist and no more.
For this reason, bitcoin experiences high volatility in its price, and it is highly speculative. As with the same with other coins.
Is Cryptocurrency Safe? Your Take Home on Crypto
There is a lot of conflicting information on cryptocurrency. People want to know what it is, what it can offer them, is it the future or will it die in the near future.
You can now at least stop calling yourself a newbie, as we have already gone over its definition and how it works, both in technical and non-technical language.
Bitcoin is certainly not the only cryptocurrency, since it was first launched way back in 2008.
In fact, there are hundreds of cryptocurrencies and platforms, that have been created using the same peer-to-peer technology as the digital currency, and they are collectively referred to as Altcoins (alternatives to Bitcoin).
The future is bright for cryptocurrency. Its technology is still in its infancy and it will take time for it to be perfected.
Crypto got popular due to its usefulness and the benefits over traditional currency.
And just like anything new, there are always people who are trying to manipulate the system for their own selfish gain. Hence, cryptocurrencies and the blockchain network have widely been used in financing scams and illicit activities.
In the end, whatever the future of cryptocurrency might be, it will always have its place in the market. Its technology and features allow people to have valuable assets that they can own as they would any other investment product.
How Will We Stimulate Your Neurons?
The future of money depends on the future of technology
We shall talk more about what cryptocurrencies are, what their advantages are, how to use them and so much more. You will have a better idea of where coins excel, where they fall short, and the really cool technology that makes them work.
We shall also cover NFTs (Non-fungible tokens) since they use blockchain technology and talk about what rug pulls are.
You will also see how each different type of coin plays an important role in the cryptocurrency world, and we shall touch on the numerous scams that have been happening with crypto.
The crypto world is constantly growing. You have the opportunity to participate in something that could radically change your view, on the way we spend money, and I hope you will enjoy learning about using Cryptocurrency.
Even if crypto is not the right fit for you, or perhaps its speculative nature fuels your fear receptors, understanding and knowing the technology behind crypto can prove to be beneficial to the future You.
Be sure to Check out our Cryptocurrency Category, as this is where these types of content will be discussed at length.
