Are you wondering what on earth is a cryptocurrency but have no clue where to start?
Here are the 5 words you need to know:
I am going to make it very easy and simple for you.
What is Cryptocurrency?
Cryptocurrencies are digital currencies, just like the US Dollar, Euro or Yen.
They work a lot like your online bank account or bank card transaction except they decentralized.
This means that the prices are not controlled by a central authority such as the government.
Transfers are done directly from one person to another just like cash transactions.
Cryptocurrencies have all the benefits of cash and digital transactions BUT with additional benefits.
You can send and receive any amount to anyone around the world instantly with very low transaction fees.
Bitcoin is the first form of digital cash ever created. It is also the most popular cryptocurrency.
The reason Bitcoin gained so much popularity, is that it was released in 2009, during the global financial crisis.
In some countries of the world, people could not even withdraw their money from banks.
This was a time when no one trusted banks or governments.
Bitcoin has existed for around 10 years and has users around the world.
Blockchain is the technology which allows cryptocurrency to exist.
As the user sends crypto to another person through a network.
The transaction gets validated and verified on this network.
This process is done by thousands of remote computers in the network, they are called cryptocurrency miners.
The transfer is then published on a distributed public ledger called the Blockchain.
It is very difficult to modify a transaction once it has been entered in the ledger.
This is one of the reasons many big companies such as IBM are investing massively in blockchain technology.
This is how new bitcoin and other cryptocoins are created.
Cryptocurrency miners are the people all over the world who solve the complex arithmetic questions needed to verify and validate a transfer on the network.
The first miner to complete the transaction is rewarded cryptocurrency as an incentive.
The miners are very important and help sustain the network.
To sum up:
Bitcoin is the first form of cryptocurrency and blockchain is the technology that allows Bitcoin to exist.
Founder of Satoshi Library
Marie is a crypto-enthusiast who was born in the Seychelles and is currently living in Mauritius. She has 13 years experience in the BPO and the teaching industry. She specializes in keeping things easy and simple.