Cryptocurrency: A Quick Guide

By Darlene Mitchell December 31, 2021 December 31, 2021 Banking, Cryptocurrency, Digital Freedom, Economics, Financial News, Privacy & Personal Information

Cryptocurrency: A Quick Guide

Quite simply, cryptocurrency is digital money. It does not exist in the real world. There are no physical coins, or bills associated with it. It is not like stocks, real estate, jewelry, art, gold, and other valued metals. Cryptocurrency has no use or value other than the possession of it. Cryptocurrencies are not associated to valuable assets — they are not tied to anything of value in the real world, and this often causes the ‘value’ to fluctuate erratically.

By Mahinroop PM

‘Crypto’ Defined

Cryptocurrency or ‘crypto’ is any form of digital or virtual currency that uses cryptography to secure transactions and advanced coding to store and transmit cryptocurrency data between wallets and public ledgers. Cryptocurrencies do not have a central regulatory authority and they use a decentralized system to record transactions. Cryptocurrency is a digital payment system that does not rely on banks to verify transactions. Cryptocurrency is a peer-to-peer system which enables anyone to send and receive payments anywhere in the world. The cryptocurrency payments exist as digital entries to an online database featuring specific transactions. The transactions are recorded in a public ledger when cryptocurrency funds are transferred and cryptocurrency is stored in digital wallets.

Bitcoin Emerges

The ultimate aim of cryptocurrency encryption is to provide privacy, security and safety. Bitcoin, was founded in 2009, and was the first cryptocurrency. Bitcoin is unquestionably the best known cryptocurrency and is traded like other entities for profit. Skyrocketing prices make cryptocurrency hugely popular among speculative and passionate investors. Other clever and passionate crypto investors use ‘mining’ to make money.

Solving Problems

Cryptocurrencies run on a distributed public ledger called a blockchain, a record of all transactions updated by currency holders. Cryptocurrency units are created through a process called ‘mining’ which includes using enhanced computer power to solve complicated mathematical problems that generate coins. The mining process is considered environmentally damaging.

As An Investment

Cryptocurrency can be purchased from brokers and it can be spent using cryptographic wallets. Cryptocurrencies and applications of blockchain are still emerging; some of the best known cryptocurrencies include Bitcoin, Ethereum, Litecoin, and Ripple.

Bitcoin

Bitcoin is the best known and most commonly traded cryptocurrency. Bitcoin was developed by “Satoshi Nakamoto,” a pseudonym for an individual whose identity remains unknown even today. Non-Bitcoin cryptocurrencies are called ‘alt coins’ and that term is used to distinguish them from the original Bitcoin.

Ethereum

Ethereum is a blockchain platform with its own cryptocurrency called Ether or Ethereum. It was developed in 2015. It is the most popular cryptocurrency after Bitcoin.

Litecoin

Litecoin is very similar to Bitcoin, but it features novel innovations including faster payments and faster processes that allow for more transactions.

Ripple

Ripple is a distributed ledger system founded in 2012 and it can be utilized to track different types of transactions including cryptocurrency.

Buying And Using Cryptocurrency

Cryptocurrency can be bought from a traditional broker or dedicated cryptocurrency exchange. Each of the cryptocurrency exchanges offer different cryptocurrencies, wallet storage, and interest bearing account options. Cryptocurrency purchases with credit cards are risky and some exchanges don’t support them. There are other ways to invest in cryptocurrencies including payment services like PayPal, Venmo, and Cash App. The number of institutions accepting cryptocurrency are growing, and large transactions involving cryptocurrency are no longer rare. The list of companies that accept cryptocurrencies is growing, familiar names like Microsoft, AT&T, Starbucks, and Overstock. It is hard for hackers to tamper with cryptocurrency and crypto transactions require a two factor authentication process making the transaction safe for retailers.

*Fiat money is a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the , are fiat currencies. People fearing inflation and global uncertainty seek safety and many see it in crypto.

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Cryptocurrency: A Quick Guide

Cryptocurrency: A Quick Guide

Cryptocurrency: A Quick Guide

By Mahinroop PM

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