Cryptocurrency: a Beginner's Guide

 As of 2021, there are over 300 million crypto users worldwide. Together, they buy and sell the more than 6,500 cryptocurrencies that are in existence. The total value of the crypto market stands at a whopping $2.48 trillion, according to the latest calculations.

You may have heard the news that crypto is getting big - very big, and you want piece of the pie. However, the world of crypto can be insanely hard to comprehend without the right tools. That's why we have created a beginner's guide to cryptocurrency. Read on to find out the basics of all things crypto!

What is cryptocurrency?

Cryptocurrency is typically decentralized digital money designed to be used online. Decentralized means that the control and decision-making power is no longer placed in a centralized entity, which could be an individual, an organization, or group; but in a distributed network of equals. The concept of cryptocurrency was invented by Satoshi Nakamoto, an individual whose real identity is still unknown to this day. In 2008, they published a paper named Bitcoin: A Peer-to-Peer Electronic Cash System that would come to kickstart the first crypto-currency ever: the Bitcoin.

The idea was revolutionary: a digital currency or token could be duplicated in as many transactions as decided by the buyer unlike a traditional coin or bill that can only exist in one place at a single time. Digital currencies have no physical space, so to use them in a transaction doesn't mean removing them from someone's possession. Nakamoto outlined a decentralized approach to transaction, which would eventually lead to the creation of blockchains.

The first Bitcoin transaction supposedly happened when someone used 10,000 Bitcoin to purchase pizza. Today, 10,000 Bitcoin is worth $321,658,000. 13 years later, it would be a very, very expensive pizza... Nevertheless, Bitcoin has remained the most popular and lucrative cryptocurrency ever since Nakamoto's paper.

What are blockchains?

To function, cryptocurrencies use blockchains. The concept of blockchains might seem complicated, but it actually amounts up to a simple concept: a database. A blockchain compiles information together in groups, called blocks. When each block reaches capacity, others are created, and a chain of data known as the "blockchain" is formed.

How could cryptocurrency be the future if finance?

Cryptocurrencies can be used to buy and sell goods or services, but can't be manipulated by any central authority. Cryptocurrencies will remain secure whatever happens to a government, unlike banks. In a world where crises like the 2007 Subprimes happen, this is a massive advantage.

Crypto provides equality of opportunity. It disregards where people were born or where they live. Anyone with access to the internet can have access to crypto. Crypto is borderless and facilitates free trade. In places where inflation is high, crypto can serve as an alternative.

What can you do with cryptocurrency?

You can do many things with crypto, including:

  • Travel the world, cutting down on exchange fees between different countries and currencies
  • Buy property in a virtual gaming universe
  • Explore decentralized finance, or DeFi
  • Trade crypto, by buying and selling when appropriate 

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