Simplest way to understand cryptocurrency

What is cryptocurrency?

We are so familiar with the word but minimal participation and it’s utility to people is proof enough that not a lot of people go beyond spelling and pronouncing the word CRYPTOCURRENCY or CRYPTO. True understanding is in its utility, and if the “the money not controlled by the government” has no real time utility for you then you may as well not understand it.

Think of it as a technology, Cryptocurrency is digital currency that exists on a decentralized system called the blockchain. Cryptocurrency serves as an umbrella term for all digital currencies. These can be accessed through the use of a crypto wallet. Blockchain technology is unique in that all transactions are permanently etched into the blockchain for anyone to view at any time—the blockchain record can only be added to, and the recorded history can’t be modified. Cryptocurrency relies on blockchain’s decentralized network of computers to validate and verify its ownership.

Cryptocurrency is a digital payment system that doesn’t rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.

Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety.

The first cryptocurrency was Bitcoin, which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.

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