What Is Cryptocurrency?

What Is Cryptocurrency?

Cryptocurrency is “a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.” Now, if you’re wondering what’s cryptography, it’s a super-duper secure form of communication that lets only the person receiving and sending the transaction to be able to read it.

A Few Interesting Points

  • Cryptocurrency’s decentralized network of computers allows it to function outside government regulations and banking policies, giving the average person a new sense of trust.
  • Many tech experts feel that blockchain and its different related technologies will completely transform the real estate, legal, and finance industries.
  • A significant advantage of cryptocurrencies is that they allow for much faster and cheaper money transfers, and with a decentralized system, there’s no single point of failure.
  • Some disadvantages of cryptocurrencies are that their prices and value tend to be quite volatile and require a lot of energy for mining.
  • Mining is the process where specialized computers, called nodes or mining rigs, keep track of all transactions and receive crypto as a reward.

Some Cryptocurrency Basics

Cryptocurrencies, digital currencies used in a cryptographic system, can be considered more software that provides a specific function. That function ensures that online payments are secure without third parties such as banks or credit card companies.

Types of Cryptocurrencies

At the moment, Bitcoin is the king of the cryptocurrency world and is the most valuable. In 2008, Satoshi Nakamoto invented it and introduced it to the world through the white paper, a document that details everything related to that project.

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michaelpaulyn

michaelpaulyn

Just a copywriter out to simplify the world of tech, one blog at a time.