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Cryptocurrency Explained

The reason digital currency has taken on the name “cryptocurrency” is because it derives its name from cryptography.  Cryptography is the art of protecting information by transforming it (encrypting it) into an unreadable format, called “cipher” text. Only those who possess a secret key can decipher (or decrypt) the message into plain text. Cryptocurrency uses the encryption equations of cryptology to secure and protect the transactions.  This is the same technology which protects credit card transactions over the web today implementing encryption using SSL (Secure Sockets Layer).

The first cryptocurrency that began trading on a mass scale is Bitcoin which began its inception in April of 2009.   Note I didn’t say the first “digital” currency, because there were a few before Bitcoin such as e-gold.  Bitcoin is currently the most traded cryptocurrency at this time.  Bitcoin may be the first cryptocurrency but there are many more.  There are over 270 different cryptocurrency coins at the time of this writing! As you dig into cryptocurrency, you’ll surely run across these common ones: Dogecoin, Ripple, and Litecoin.  Anyone with technical knowledge and a good idea for a digital coin can create one on their own.  You can find out more information about this at: www.github.com (search “bitcoin”)

You Cant Hack Them!

No matter what cryptocurrency you choose to use or accept; they all have one thing in common: they can’t be inflated. (With a few exceptions on experimental coin)  Each cryptocurrency has a set number of coins or a calculation that will determine the amount of currency that will ever be created.  No organization can vote to make more.  Nor can it be destroyed physically in the real world since it lives completely online.  Cryptocurrencies are backed by the most important resource: electricity and computing power.   The only way this infrastructure could fail is if the entire Internet crashed.  It is unlike the fiat that has no print limit and is backed by nothing but government trust and opinion.

Trading with Cryptocurrencies is faster and less hassle. Instead of carrying around a physical wallet that can be stolen or lost, you can now keep your funds in a digital wallet on your cell phone that can be tracked by GPS.  There is less stuff to carry around and it’s more secure because you can lock your phone and computer with passwords and security functions. Using bitcoin is also cheaper than using other ways to transfer money.  Each transaction in bitcoin is either free or has a fee of at least .0001 bitcoin which is about a nickel as compared to the dollar.  The average US banking transaction fee is $3.00 dollars. Do the math. Thank you for reading this article! For more awesome content please go back and visit my trending blog again! 

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