There is a lot involved when it comes to cryptocurrency. It can even be a little overwhelming to even try to process the whole idea and where to even begin with when it comes to understanding this as it involves a lot of movement, time and investment. But, we’ll be focusing for now on what cryptocurrency is exactly.
In the simplest terms possible, cryptocurrency is basically digital or virtual money that is not backed up by the government. Rather, they are backed up, or supported by means of other respective networks. Everything is done online.
So, to set an example. The money we use with our cards is basically digital as well until we retrieve money from the ATM. The only difference is that we can get charged extra for interests and such while with cryptocurrency, you can easily make a transaction without worrying about extra charges. But, if the transaction has not been confirmed by the other person, then there would be no point and it would practically be useless. Also, another thing about cryptocurrency is that it is not recognized as valuable by all places and therefore, you cannot purchase anything you want with it.
And how did the entire idea of “cryptocurrency” start?
No one can really say who, because apparently it is unknown but, it did start out in 2009 with an experiment by creating the Bitcoin. The experiment consisted of seeing whether they could create some sort of usable digital currency. The problem that was occurring was that there was an issue with double-spending. Basically, that means that a currency could be copied indefinitely and re-spent.
Cryptocurrency is also known as money tokens, and all of these are kept track on what is known as a blockchain. A blockchain is a digital ledger or a type of record keeping. So now, thanks to this digital record (or blockchain) all transactions are recorded and can always be looked back on in case any suspicions arise of double-spending. And if the problem were to arise, it could be eliminated. But, in essence to this, no coin or transaction can be duplicated, as every transaction is recorded.
The real question here is, “how can cryptocurrency benefit us?”
Apparently, in many aspects. First of all, as mentioned at the beginning of this article, it can all be done through the internet. For instance, if a close friend or relative needs money as soon as possible, you can make a transfer of a cryptocurrency and they will receive the transfer instantly. The best part of it is, that you would not have to go through the difficulties or time and expenses that a regular transfer with a regular international bank would make you go through. There is nothing to intervene in when it comes to making a cryptocurrency transfer.
It might be a bit difficult to wrap your head around what it is and there is still plenty of information to discover when it comes to cryptocurrency. But, the more time you invest in reading and searching for information on this fascinating topic, the more captivating it will seem to you.
