Cryptocurrency is a digital currency that is created, stored and managed electronically. There are no physical coins or notes to exchange, just digital ‘tokens’. Cryptocurrencies were designed to be anonymous and self-regulating. This means they can’t be counterfeited and the way they work means that governments and central banks can’t interfere with them.
The most famous and first cryptocurrency was Bitcoin, created in 2009. Since then many more cryptocurrencies have been created. They are usually based on the design of Bitcoin, but have been modified in some way (e.g. Litecoin). The value of cryptocurrencies varies greatly depending on supply and demand; their creation rate can also fluctuate (although they are generally limited in supply).
Advantages
● No government interference/manipulation – One of the main goals of cryptocurrency is to solve issues caused by centralisation. Because there is no central authority to control the currency, it operates without any interference from governments or banks. This means that regardless of what happens in the world, you will always have access to your money. It also means that if you live in a country where banks are prone to failing, your money will be safe as long as you own some crypto
If you’re looking at this post, then you probably already know what a cryptocurrency is. But just in case, we’ll define it here and go over the basics.
A cryptocurrency is a digital currency. Unlike traditional currencies such as the US dollar or the Euro, cryptocurrencies are not issued by any central authority. This means that there is no government entity to back them up, and no banks to regulate them. Instead, cryptocurrencies are created through a process called mining.
Cryptocurrencies are also stored in digital wallets. Digital wallets are online accounts that allow users to store their cryptocurrency and interact with it. Cryptocurrencies can be sent from one digital wallet to another through wallet addresses.
If you are one of the millions getting into crypto and blockchain, welcome! I’m a huge fan of this space and excited to see how far we can go with it.
This is a beginners guide to investing in cryptocurrency. I’ve been in this space full time for several years now, and I’ve learned many lessons along the way.
What is “cryptocurrency?”
A cryptocurrency is a digital currency that uses cryptography as its primary means of security. This means that transactions cannot be modified or forged without being detected by the network, and it allows for a trustless system of transferring currency from one user to another.
The most widely known cryptocurrency is Bitcoin, but there are **thousands** of others, with new ones being created all the time. Many of these other cryptocurrencies use similar technologies (such as blockchains), but some have unique features that set them apart from their peers.
How does it work?
Cryptocurrencies, also known as virtual currencies, digital money/cash, or tokens, are not really like US Dollars, Euros, Venezuelan Bolivars or whatever traditional currency you want to compare them to. They are a representation of value that is not governed by a central authority, and instead relies on a peer-to-peer network to verify transactions. This makes cryptocurrencies immune to government manipulation and control.
The primary benefit of using cryptocurrencies as your method of transacting cash online is that they are safe and offer you anonymity. Bitcoin uses the SHA-256 hashing algorithm with an average transaction confirmation time of 10 minutes. Other currencies like Litecoin and Dogecoin use Scrypt, which is designed specifically for people who have lower performance GPUs. This makes mining these coins more accessible to the every day person. The security also comes from the fact that cryptocurrencies are built on blockchain technology.
A blockchain is a digital ledger recording cryptocurrency transactions, maintaining records referred to as ‘blocks’ in a linear, chronological order. Each transaction added to a blockchain is validated by multiple computers on the Internet. These systems approve the transaction, adding it to the next block in the chain and thereby granting it validity. It’s very secure because people can only change what they own
The term cryptocurrency is generally used to describe a digital asset in which encryption techniques are used to regulate the generation of additional units and verify transactions on a blockchain.
Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies. Bitcoin became the first decentralized cryptocurrency in 2009. Since then, numerous cryptocurrencies have been created. These are frequently called altcoins, as a blend of bitcoin alternative. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is related to the use of bitcoin’s blockchain transaction database in the role of a distributed ledger.
Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers. In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.[14]
According to the experts, cryptocurrency is a digital currency which primarily works as a medium of exchange. It uses cryptography to ensure the security of transactions along with controlling the creation of new units. It is decentralized, which means it is not regulated by any central authority like banks or governments.
The first cryptocurrency was Bitcoin, which was created in 2009 and is still the best known. Today there are hundreds of other cryptocurrencies, often referred to as Altcoins. These include Ethereum, Ripple, Litecoin and many more.
Benefits of Cryptocurrency
There are many benefits associated with cryptocurrency:
No central authority: The absence of third-party interference makes it free from government regulations and bank related fees such as transaction fees and service charge
Transaction anonymity: The transactions made with cryptocurrency are anonymous i.e., you don’t have to reveal your identity in order to make transactions.
Immutable: Once a transaction has been made, it cannot be reversed by anyone. This provides more security for both buyers and sellers.
Faster transactions: With cryptocurrency, you can transfer money anywhere in the world within minutes irrespective of your nationality or location
Decentralized system: There is no central point involved in this system which makes it more secure than centralized systems like PayPal
Cryptocurrency or crypto currency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency. Since then, over 4,000 altcoin (alternative coin) variants of bitcoin have been created.
Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is related to the use of bitcoin’s blockchain transaction database in the role of a distributed ledger.
Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers. In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.[23]
As of September 2017,