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What Exactly Is Cryptocurrency And Its Effect?

WHAT EXACTLY IS CRYPTOCURRENCY

The Mysterious Beginning 

In February 2009, Satoshi Nakamoto, a pseudonymous being, went online and made an official post about his invention of cryptocurrency.

This pseudonymous being, even though no one can tell who or what he really is, whether or not he is a single individual or a group of people, created something that has lasted people over a decade and would surely last more.

It all started when Satoshi Nakamoto started doubting the banks and government organizations with his money.

In his words, traditional currencies were too reliant on the trustworthiness of banks or governments to work properly.

Certainly, this birthed the idea of Bitcoin, the first cryptocurrency, and it asserted that properties and currencies can actually be used without relying on the banks.

What Is Cryptocurrency?

What Is cryptocurrency

The word “cryptocurrency” was coined from two words— encryption and currency.

In layman’s terms, cryptocurrency means a currency that is encrypted.

Crypto, a short form of Cryptocurrency, is any form of currency that exists digitally or virtually which secures its transactions with the help of cryptography.

Unlike banks all over the world which rely on their central issuing authority and their regulating authority, cryptocurrency uses a decentralized system to record transactions and issue new units.

Cryptocurrency is a type of decentralized system which allows anyone to send and receive payments from anywhere in the world. Crypto also serves as a bunch of digital entries to an online database describing specific transactions, and ensuring its easy payment.

Cryptocurrencies run on a decentralized public ledger known as the Blockchain, which records every form of transaction you make with crypto funds. This Blockchain is the security base of cryptocurrency.

The Blockchain uses a list of advanced coding systems to store and transmit cryptocurrency data between wallets and to public ledgers, making sure the currency in present use can be seen by others and can’t be used again, unless for another form of transaction. The aim of this encryption is to provide security and safety.

Even though they are named Cryptocurrencies, crypto doesn’t actually exist in physical form like paper money, and they are not regarded as currencies, in the normal sense. Yet, the system seems stronger than the normal currency the bank uses.

The system keeps an overview of cryptocurrency units and their ownership.

Examples Of Cryptocurrencies

Since the conception of Cryptocurrency, many other creations have come into light, each taking their spaces in the crypto world. Five of these cryptocurrencies are listed below:

1. Bitcoin

The first cryptocurrency was Bitcoin, which was originally released as a software in 2009, by Satoshi Nakamoto. However, as of June 2023, we now have over 25,000 other cryptocurrencies in the marketplace, more than 40 of them having a market capitalization exceeding $1 billion. The Bitcoin is popularly acronymed as BTC.

2. Ethereum

After Bitcoin, the most popular cryptocurrency is the Ethereum which was developed and released in 2015, by Vitalin Buterin, who had conceived the idea, and four others. The common abbreviation for the Ethereum is the ETH. It introduced the concept of smart contracts, enabling developers to build decentralized applications (DApps) on its blockchain.

3. Ripple

This was released in 2012 by Chris Larsen and Jed McCaleb, who aimed to facilitate fast, low-cost international money transfers between financial institutions. This is abbreviated into XRP.

4. Litecoin

Popularly shortened into LTC, the Litecoin was created by Charlie Lee in 2011 as a “lite” version of Bitcoin. However, it offers faster transactions.

5. Cardano

In 2017, Charles Hoskinson, one of the co-founders of Ethereum, brought about the existence of Cardano, further satisfying the needs of sellers online. It aims to provide a secure and sustainable platform for the development of decentralized applications. This currency is popularly abbreviated to ADA.

Conclusion

Today we now have much more cryptocurrencies, and you can use any however you wish. However, each of these cryptocurrencies has its own unique features and has made significant contributions to the blockchain industry. I advise you to learn about them well before delving into the crypto world.

Cryptocurrency is changing how we handle money. It’s like having your own bank, letting you make transactions without traditional banks. This means more control over your money. But, be careful—it can be unpredictable. Also, the technology behind cryptocurrencies, called blockchain, is making things safer and more transparent. It’s not just about money; this tech is changing other industries too. As we deal with these new changes, it’s important to understand how cryptocurrencies work, so we can use them wisely and adapt to this evolving way of handling finances.

John Adebayo
John Adebayo
https://www.johnadebayo.com

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