Easy Guide On What Is Cryptocurrency?

Cryptocurrency has been a hot topic for quite some time now. Although first mentioned or created in 2009, there has been a surge in interest and its purpose.

Cryptocurrency or Crypto is a digital currency, a form of payment used to buy goods, services, and much more. Just like the Dollar, the Euro, the yen, and many other currencies out there.

What makes Crypto stand out from the rest is that transactions are strictly digital.

Here is something worth noting: Digital currencies are currencies that are only accessible with computers or mobile phones, as they only exist in electronic form. All cryptocurrencies are digital currencies, but not all digital currencies are Crypto.

Up until now, Cryptocurrencies have largely been used by big corporations. Companies issue their currencies as tokens, so these can be traded specifically for the good or service they provide.

A bit like arcade tokens or casino chips. Once you’ve won some, you then exchange those tokens for the “real currency”

The same thing applies to Crypto, you need to exchange the “real currency” (Dollar, Euro…) for the cryptocurrency to access the good or service offered by the company.

According to Statista, there are about 4000 cryptocurrencies to date. Which is an increase from just a handful of digital coins in 2013. Note, however, that a large portion of these cryptocurrencies might not be that significant. Due to how open the creation process of a cryptocurrency, it is relatively easy to make one. Indeed, it is believed that the top 20 cryptocurrencies make up nearly 90 percent of the total market.

Here are some of the top movers and most talked about when it comes to Crypto:

1. Bitcoin: Bitcoin is a consensus network that enables a new payment system and completely digital money. It is the first decentralized peer-to-peer payment network powered by its users with no central authority or middle-man. From a user perspective, Bitcoin is pretty much like cash for the Internet.

2. Ethereum: Ethereum is an open-source platform that uses blockchain technology to create and run decentralized digital applications or “DAAPS” that enable users to make agreements and conduct transactions directly with each other to buy, sell, and trade goods and services without a middle man

3. Litecoin: Litecoin is designed to be a peer-to-peer currency, just like Bitcoin. However, the Litecoin transaction time is four times faster than Bitcoin’s.

4. Cardano: Cardano can be used to build Smart contracts; and in turn, create decentralized applications and protocols. Additionally, the ability to send and receive funds instantly, for minimal fees, and have many applications in the world of business and finance.

5. Polkadot (DOT): Polkadot is a unique proof-of-stake cryptocurrency aimed at delivering interoperability between other blockchains. Its protocol is designed to connect permission and permissionless blockchains as well as oracles to allow systems to work together under one roof. It is a platform that allows diverse blockchains to transfer messages, including value, in a trust-free fashion; sharing their unique features while pooling their security.

What is Blockchain?

Cryptocurrencies work using a technology called “blockchain”. Blockchain is a decentralized technology spread across many computers, much like a big server but spread out Worldwide (almost). It manages and records transactions. Part of the appeal of this technology is its security and freedom. Because it is not owned or controlled by anybody.

Given the fact that the Blockchain is secure and not controlled by anyone, it is pretty much the perfect host for cryptocurrencies for security and decentralization reasons.

We’ve seen a rise in popularity and functionality lately and innovations like NFT’s. Cryptocurrency is here to stay and will be part of our future.