“What is cryptocurrency?” I asked my friend who is a crypto trader while she was bent over her laptop one morning.
“Cryptocurrency?” It was a rhetorical question; like she was turning it over in her mind thinking of the best way to phrase it or maybe she just couldn’t believe that in this time and age, it was something that needed any explanation.
“Digital money.” She said finally.
Digital money, in my own opinion, is the best way to describe cryptocurrency. Cryptocurrencies or digital currencies do not exist in physical forms like coins and cash. Nevertheless, it holds significant value and can be stored in a ‘digital wallet’ on a smartphone or computer. So what we’re saying is cryptocurrency is money, but in virtual format. What then can you do with cryptocurrency? We’ve established that cryptocurrency can be used in just the same way as money, only that it differs in the form. Therefore, it can be used for just the same things money is used for across the globe: shopping, travelling, buying property etc.
If you are completely new to the world of cryptocurrency, it could be easy to confuse this with regular money. Rookie move. Cryptocurrency allows for both anonymity and transparency. As a result of their decentralized nature, they are able to exist outside the control of government and central authorities. This is what I am saying in plain terms: when your younger sibling hits you up to emotionally blackmail you into sending them money and you give in, it shows up at the end of the month in your bank statement. Every financial authority that cares to know is keyed into this transaction. However, if you were asked to send money and you sent one Bitcoin, nobody knows nor cares about this transaction. It is between, you, yourself and the recipient, which essentially makes it more affordable and secure than traditional payment systems.
You might wonder how cryptocurrency is secure without a bank or government involved… or not. Anyways, this is an informative piece so I am obligated to allay your fears because there is an interesting piece of technology called a blockchain. What is a blockchain? In very simple terms, blockchain is the technology used to send cryptocurrency. In crypto jargon, however, blockchain is the distributed ledger that holds cryptocurrency transactions. A blockchain consists of blocks and each block in the chain is given an exact timestamp when it is added to the chain. It sounds complicated, but it doesn’t have to be and a future article on blockchain will explain why.
Cryptocurrency is the future. It sounds cliché, however when you take into account that Bitcoin skyrocketed in price from $900 to $20,000, it kind of makes you think… right? It is true that some cryptocurrencies fade as quickly as they came into existence; however some cryptocurrencies like Ethereum continue to go up in value. This is why a lot of people purchase coins before they become even more valuable.
Now that I have your attention, here are just some of the cryptocurrencies you can purchase if you’re ready to do what the cool kids do: bitcoin, ethereum, dash, monero, ripple, ethereum classic, litecoin, NEM, augur, and maidsafecoin. Don’t forget to invest or trade at your own discretion. I am not giving any form of financial advice and will not be held liable for your loss(es), but if you do make an interesting profit, do not forget who put you on.