In the past few years, the word ‘cryptocurrency’ has become more popular by the day. And it’s rare to find an article about this new technology without mentioning the word bitcoin. If you feel left out when your friends discuss blockchain, cryptocurrency, or mining at parties, well… this article is for you.
Basics of cryptocurrency
Cryptocurrency, like any other type of currency, doesn’t, in itself, hold any value. People’s trust generates value in it as a means of transaction. This concept is similar to how a $1 note doesn’t fulfill any human needs, yet humans want it more than anything, so much, so that entire economies rely on it to function. One can earn bitcoin by investing it on the bitcoin faucet.
But this is where the similarities end. Like the US Dollar, centralized currencies generate their value from the Government’s guarantee to accept them as means of transaction. On the other hand, Cryptocurrencies are decentralized digital currencies. The value they hold arises from people’s trust in the verification and processing of the ledgers of transactions between its users. These transactions are stored on a large network of computers. Making it essentially impossible to fake the records or to create counterfeit currency.
Bitcoin: the golden boy
Cryptocurrencies would not have been what they are, had it not been for bitcoin. Along with being the first cryptocurrency, it is also the highest valued and most popular cryptocurrency. The credit for its invention goes to an unknown person, who used the name Satoshi Nakamoto. Its value peaked when one bitcoin was equal to $49,951 on February 15, 2021.
Its popularity also has to do a lot with how it maintains the user’s anonymity, making transactions more untraceable. So, suppose you’re living in a highly autocratic country. In that case, the lack of the Government’s control over the value and use of this cryptocurrency might be a very attractive feature for you.
Chris Sanchez is a founder of Readroldo blog, where one can post guest blogs in many categories, such as health, travel, fashion, and more. I write for all kinds of businesses that coordinates with the project details from beginning to the final end production. It all starts with the successful interaction with the professionals that are involved in the project.
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Chris – who has written 452 posts on Innovation is the best way to win.