Cryptocurrency is a currency that was created in 2008 and since then has grown extensively. With reports stating bitcoins being worth thousands of dollars and many people talking about these coins, it’s important for us to have a basic understanding of what these are.
After all, there are some safety elements that are worth discussing. Especially if you are someone who wants to dabble and explore crypto.
First of all, cryptocurrency is a digital decentralized currency, meaning no country, government or bank controls it. It uses encryption in order to control the so called money but also to verify transactions. Because of these features, many individuals see the currency as an alternative to all the paper money that we have today.
But what exactly does that mean?
First of all, the encryption process ensures that any person sending money or receiving money is unknown and the chance of fake money transfers are minimal.
And what decentralized means is that the currency isn’t held under a single organization. For example, the fiat currency we have (dollars / pounds / euro) is backed by the government. With cryptocurrency, the money is backed by hundreds of thousands of computers, making it practically impossible for a hacker to crack the system.
Because of these features, it makes sense why people would gravitate towards this. Not to mention that there are hundreds of different coins so it’s easy for people to join in and begin trading and buying particular coins, many which have different associated benefits.
But just because this system is highly secure doesn’t mean that it’s an entirely safe environment to be in. I’ll talk on this point in a later episode but there are still scams about.
What’s also important to note about cryptocurrency is the technology that’s behind all of it: Blockchain. For cryptocurrencies in general, the blockchain is basically used as a public ledger. It’s the source behind new coins and them also being created through a process called mining.
But other companies have looked at this technology and have been working to implement the technology into their business:
-Ford Motor Company launched a blockchain research group for the auto industry.
-Amazon offers cloud integration with a variety of blockchains-.
-Estonia has embraced blockchain for their healthcare system.
-Blockchain can track land title records, copyrights, licenses, agreements, and much more.
Crypto ”currency” itself is only a small portion of this technology, and is part of a bigger picture that we should understand with Blockchain.