What is Cryptocurrency?

What is Cryptocurrency?

Do you have questions running in your mind about cryptocurrency or cryptocurrencies?  Well to answer those, read on… A cryptocurrency is a digital money created from a code which was first invented by Satoshi Nakamoto, the inventor of Bitcoin.  Satoshi Nakamoto invented Bitcoin as a digital currency in the “peer-to-peer electronic cash system”.  His goal was to build a digital cash system which is decentralized, no server, no central authority in their peer-to-peer technology. To further explain what is cryptocurrency, first we need to understand that cryptocurrency is a medium of exchange, created and stored electronically in the blockchain, using encryption techniques to control the creation of monetary units and to verify the transfer of funds from one peer to another.

what is cryptocurrency

Transactional Properties of a Cryptocurrency

GLOBAL 

As compared to bills and coins as denominations circulating within each country in which  this circulation is limited in its territorial distribution,  like USD in the United States, PHP in the Philippines, AUD in Australia, CHF in Switzerland, GBP in Great Britain, JPY in Japan, CNY in China, etc., cryptocurrency or cryptocurrencies hold a global distribution of transactional inflow and outflow – there is no territorial limitation.  Another difference is that bills and coins are tangible while cryptocurrencies are intangible.  Bills and coins can be transferred from person to person or business to business through personal transactions or bank transactions through account numbers and swift codes while cryptocurrency or cryptocurrencies can be transferred through address to address which consists of a random alpha-numeric characters of around 30 characters per address.  It is global because a transaction can take place from anywhere in the world without any intervention of a third party.  One can send or receive a cryptocurrency or cryptocurrencies from one country to another country at anytime.  The sender and recipient can transact without circulatory regulations.

FAST and SECURE 

Upon confirmation of a transaction, transfers like sending or receiving cryptocurrency can occur almost instantaneously.  Transactions can be completed in less than an hour.  It is secure because funds are locked in a public cryptography system.  Only the owner of the private key can send a cryptocurrency using his own address and the transaction is transparent.

PSEUDONYMOUS

Receipt and transfer of cryptocurrecy funds do not require the names of the owners of addresses. It only requires the sender’s and receiver’s addresses. So, there is equality in this pseudonymous transaction. Unlike some kind of transactions where one will be treated as a VIP while others fall in line in a queue for hours only to find out that he will go back later because of some reasons, etc.

IRREVERSIBLE

Once a transaction is confirmed, the transaction is irreversible. There is no cancellation or deletion of transactions.  Each transaction goes in the blockchain. So, transactional transparency is inherent in every transfer of cryptocurrency – it shows the amount, date and time and the addresses involved and is recorded in a digital Ledger.

EXAMPLE of CRYPTOCURRENCIES

Here are some examples of cryptocurrencies

  • Bitcoin
  • Ethereum
  • Dash
  • Altcoin
  • Litecoin
  • Waves
  • Ripple
  • Monero

Bitcoin serves as the cryptocurrency digital gold standard while Ethereum serves as the cryptocurrency digital silver standard in the whole cryto industry worldwide.  The value of Bitcoin from its invention is zero to more than USD4650 per BTC as of this writing (December 2018) and it has reached more than 200,000 transactions per day.

What is Cryptocurrency Mining

We need to understand that everybody can be a cryptocurrency miner, while the decentralized system or network assigns no authority to anyone.  So, what is cryptocurrency mining? Cryptocurrency mining is a work of gadgets like computers, cellphones and the like.  To qualify for a mining tasks, gadgets need to find a “HASH” which connect a new block with its predecessors called, “proofs-of-work”.  Example of this is “SHA 256 Hash” algorithm, if it is a Bitcoin mining.  Some people earn through cryptocurrency mining especially if they have a very secured computer and internet connections. Others have joined some MLM groups that promote cryptocurrency mining, as well.

There is another question, is cryptocurrency the future money? Look at this.

What is cryptocurrency


So, what do you think? Share your ideas in the comment section.

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