Cryptocurrency is a digital currency, sometimes called crypto-currency, whose creation and transfer is based on cryptographic proof. It is a decentralized digital currency without a central issuing bank or single administrator which can be transferred electronically between users through the internet.
The advantage of cryptocurrency (other than being decentralized) is that it is difficult to counterfeit. Cryptography uses advanced mathematics to generate a public and private key pair from a single password. This value can then be transferred securely over the internet with the use of specialized software.
There are many different types of cryptocurrency, each with its own specific features and uses. Some allow you to make payments online and receive money instantly, while others store information on your computer as encrypted files which you can access via the internet.
Cryptocurrency is a digital currency used exclusively online. It serves as an alternative way to store and transfer money. It is also known as a virtual currency, digital cash, electronic coin, or cryptocurrency. Cryptocurrency is decentralized, meaning that it doesn’t rely on a central authority such as banks and governments to function.
Cryptocurrency is completely secure and anonymous online currency that allows you to make instant transactions anywhere in the world without paying any fees or taxes and without any complications of exchanging the currency into your own fiat currency.
Similar to email, e-commerce and Internet banking, cryptocurrency can be used from an email account or smartphone to buy anything from a plane ticket to a car or computer parts, as well as being accepted at numerous shops including hotels and restaurants.
Most modern cryptocurrencies are based on the original Bitcoin protocol but with various improvements and new features added, such as faster payments (Bitcoin transactions usually take about 10 minutes for confirmation) and lower transaction fees.
There are a lot of interesting questions to ask about cryptocurrencies. Is it a competitor to the dollar? What is the difference between a “token” and a “currency”? Who makes the rules? Where can you spend your new crypto-dollars?
My main aim here is to discuss what Cryptocurrency is and why it was invented. These are questions I think everyone should be able to answer, because they are vitally important if we want to understand what cryptocurrency is and use it.
But in this post, I will focus on one question: Why did people invent Cryptocurrency?
The short answer is that they didn’t invent it. They invented something else instead: software that works like a computer but you can only use with Bitcoins. You can’t use them for anything else. And when people say “Cryptocurrency”, they usually mean Bitcoin.
Cryptocurrency is digital money, like e-money or Internet money. It’s created by computers and is not controlled by any government, so it’s very difficult to stop it.
It’s sometimes called “crypto,” but that just means “secret” or “hidden.” You can think of it as a sort of currency that uses cryptography to make sure only the owner can transfer it, and that anyone can’t copy it while the owner isn’t looking. The security is based on math: If you try to take money out of your account without the right password, your computer will freeze up.
Cryptocurrency is a digital currency that uses cryptography to secure and verify transactions, to control the creation of new units, and to verify the transfer of ownership. Cryptocurrency is used as a medium of exchange, such as between online merchants. It is also being used as a reserve currency, similar to international currencies such as the U.S. dollar, euro, yen or yuan.
Cryptocurrency is different from fiat currency in that it has an established value based on supply and demand. Unlike fiat currencies where governments decide what the money supply will be at a fixed rate each year, cryptocurrencies are limited in number and are not regulated by any central authority.
The most notable cryptocurrencies are Bitcoin, Litecoin and Ethereum which have seen huge price increases in 2017. You can currently buy Bitcoin for around $1,000 USD per coin with a current market capitalization of over $90 billion USD (Source: https://www-central-bank.stanford.edu/~whalen/monetary_policy_and_bitcoin ).
Cryptocurrencies are distinct from stocks or bonds in that they are decentralized but traded on exchanges like stocks or bonds. This means that unlike with fiat currencies where you can exchange one for another at your local bank, you can exchange
Most people don’t know enough about how cryptocurrencies work to be able to make a sensible choice, and many of those who do are intimidated by the prospect of learning more, or believe they can’t understand it.
Cryptocurrencies are just computers that run programs that make them do things. Much of their value comes from the fact that they are not printed money but rather virtual money that lives in computers, and can be transferred electronically. The same is true of gold: it is not printed money, but rather hard physical stuff that can be moved electronically. Gold has been used as money for thousands of years because it works. But silver and copper were also used as money for thousands of years because they worked (ideally). It’s an advantage of cryptocurrencies that they don’t work yet.
I’ve heard so many people say, “I don’t understand Bitcoin. I don’t know how it works.” Or “I don’t trust that currency because it’s cryptocurrency.” Or “That stuff is just a fad; you can’t make money with it.”
But it’s not complicated. You can get all the information you need in a few minutes.
It’s worth understanding this stuff, because today there are two movements at odds with each other. One is the gold standard, or fiat currency backed by gold, which has been around for hundreds of years and has had a good track record. The other is cryptocurrency, or bitcoin and its derivatives, which have been around for only about five years and have had a dreadful track record up to now.
Bitcoin was created to be independent of any government or central bank. It was created to be decentralized, so that if one goes into bankruptcy it doesn’t matter: the money will still be there. That’s why it’s very valuable: if someone steals your bitcoin wallet file, they won’t have access to your money.
The important thing about cryptocurrency is not technology but competition: there are more cryptos than ever before, and every day new cryptos are coming online with new features.