Cryptocurrency ExplainedNov 01, 2022
Cryptocurrency, or simply crypto, is a form of digital currency that is meant to be used as a means of exchange. They are made so that you can store, send, and get value without the help of a third party.
Before cryptocurrencies, the only ways to send and receive money were through banks, credit cards, or companies like PayPal and Venmo. These businesses were needed because they were the only ones who could check that the person spending money actually has money. Banking institutions are in a unique position to do this because they have access to everyone's money and account balances.
Besides money, cryptocurrency has a lot more to offer, but let's start with the basics.
Bitcoin, the first cryptocurrency, was created in 2008 by an anonymous developer going by the name Satoshi Nakamoto. Satoshi's identity has remained a mystery, and no one has any idea of who he or she is. Whoever or whatever Satoshi is, they could be a woman, a man, or a group. Nobody has a clue!
What we do know is that Bitcoin.org was reportedly registered in August of 2008. Then, in November, Satoshi posted the now-famous Bitcoin White paper. In January 2009, the first bitcoins were released.
What is cryptocurrency?
To put it simply, a cryptocurrency is any currency that is issued and traded entirely online and uses cryptography to ensure its security. Mining is the process of using computer processing power to solve hard math problems in order to earn coins. Users can buy the currencies from exchanges and keep them in encrypted wallets until they are ready to use them.
What is cryptocurrency being used for?
One of the first things that people liked about cryptocurrency was that it let them send any amounts of money without a 3d party getting involved, so it is Peer-To-Peer (P2P). Some cryptocurrency owners today even use their holdings to perform mundane tasks like making monthly utility payments. Some people even use it as collateral for online loans. Others invest in new businesses with their digital currency.
Blockchain vs. Cryptocurrency
Blockchain and cryptocurrencies are frequently mentioned together in the same breath. Despite their obvious differences, these two forms of technology are interconnected.
Let’s think of it this way:
Imagine you're in a casino. You go inside and trade your money for chips. These chips have value only within the casino and cannot be exchanged for goods or services outside of it.
The casino chips here represent cryptocurrency coins, and the "casino" is the blockchain network, which hosts an ecosystem of users and makes the coins transact-able.
Keeping that in mind, the blockchain is a type of technology that stores information or transactions. Cryptocurrency is the asset that blockchain technology uses.
Each block in the chain has its own piece of information or data. These blocks make up a full chain and work like a big digital ledger on which all cryptocurrency transactions are recorded and kept up to date.
The blockchain is the backbone technology that makes cryptocurrencies possible.
Will Cryptocurrency Continue to Grow?
The truth is that nobody can say for sure. Still, you can rest assured that cryptocurrencies will have a place in the global economy as long as they have uses and are better than fiat currencies.
For starters, cashless and mobile payments will continue to expand globally, assisting in cryptocurrency adoption and usage. Better technology and more uses for cryptocurrencies will come, which will encourage more businesses to start taking them as payment.
The simplicity of using cryptocurrency is the primary concern. To maximize the benefits of cryptocurrencies today, you still need a certain technical understanding.
As more projects and developers work on improving the user interface and design, cryptocurrency offerings will become more accessible to the general public who lack technical expertise. When this happens, watch out, because there will be no limit to how high cryptocurrencies can go.
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