You've heard the term flying around for a couple of months, maybe a few years in fact. So now curiosity has finally got the better of you, what is Bitcoin? What exactly is Cryptocurrency? Where did it come from? Will it go away? What is Bitcoin and cryptocurrency used for?
Bitcoin and Crypto are the future. They’re here to stay. So without further ado, let’s move on to explain exactly what a Bitcoin is, what is cryptocurrency, and how you will inevitably end up using it in everyday life. We’re going to take a look at the basic principles of this phenomenon and how cryptocurrency is gaining interest from across the world.
There’s been an overwhelming increase in adoption globally, we want to dig a little deeper and look at what the appeal is of cryptocurrency. What is it exactly that is causing cryptocurrency to become so popular?
What is Cryptocurrency?
Most people know of Bitcoin, have heard of crypto. Sometimes people refer to cryptocurrency as ‘Bitcoin‘. Lets take a look at what crypto is all about:
Bitcoin is a type of cryptocurrency, and is widely agreed to be the first of its kind.
The Oxford Dictionary definition of cryptocurrency is:
a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
The most important sentence above is “operating independently of a central bank.“
You may hear this term referred to as decentralized finance.
Bitcoin launched as a form of digital money that can be sent and received – and used in financial exchange transactions.
Bitcoin uses blockchain technology, and is created (or mined) by computers using extensive hashing algorithms solving complex equations.
(Click here to read more on What is Bitcoin Mining?)
This means Bitcoin cannot be copied or counterfeit, and has a full transparent transaction history.
Who invented Cryptocurrency?
Since the late 80’s there have been several companies and individuals who have attempted (and failed) to create either electronic cash or a token equivalent, in a decentralized fashion. This was the dawn of revolutionising electronic payment transfers, with the likes of PayPal coming in to creation soon after.
However it wasn’t until 2009 that pseudonymous developer(s) Satoshi Nakamoto created the first decentralised currency, Bitcoin. It is said that Satoshi has used elements of various failed businesses in developing electronic finances.
How does it work? What is it that makes Cryptocurrency safe?
The revolutionary technology behind Bitcoin and other cryptocurrencies is what is known as blockchain technology. This is the technology that is revolutionising finance and posing a huge threat to traditional banking systems.
So, now we’ve looked at what is cryptocurrency, let’s have a look at blockchains.
In simple terms, a blockchain is a piece of technology that stores all data and records involved in any transaction, all whilst ensuring security, immutability, transparency, and decentralization.
The specific way in which each type of currency works depends on what the primary function is of the cryptocurrency.
If you would like to read more about how blockchain technology works, click here to find out what it is about cryptocurrency that is getting people so excited.
Blockchain has provided the world with an opportunity to truly own an asset of value, that can not be taken away or devalued by government in times of global pandemics and economic crises.
The evolution of money is digital and people are beginning to ask why crypto is so important.
Bitcoin is not on the traditional stock market.
There are several ways of buying, spending, selling and trading with cryptocurrencies.
To purchase crypto you will need to do so through an exchange site or Dapp (Decentralized App).
When you purchase any type of cryptocurrency it will usually be stored in a virtual wallet. There are also hardware wallets available for further security.
For anybody interested in purchasing crypto for the first time, or how crypto is exchanged and sold, we have put together a list of the best cryptocurrency exchanges and wallets! Or if you’re wondering what the best way is to keep your cryptocurrency stored safely, check out our 7 top tips on how to keep your Bitcoin safe.
What is the appeal of cryptocurrency? Why is crypto so popular?
Following the economic crash of 2008, US markets, banks and citizens lost $7 TRILLION (just for reference that’s $7, 000, 000, 000, 000) in equity value. American home owners lost a combined sum of approximately $3.3 Trillion.
The traditional banking system was failing and a huge problem was identified; this is when cryptocurrency stepped in.
Shortly after, decentralized finance was born.
Defi was developed to protect people from losing their money when they could no longer trust banks and traditional financial systems to store wealth.
Cryptocurrencies allow borderless exchange for instant and cost-effective transactions across the world!
All you need is a smart phone or computer, an internet connection and instantly you can become your own bank, you can make payments and transfers where ever and when ever you want. Now you can understand why cryptocurrency is becoming so popular and where crypto is leading us to in the future!
It’s an exciting time to be alive. As more people learn what it is about cryptocurrency that shows such huge potential, the more widely adopted it is becoming.
High quality and easily accessible education is helping to build awareness around the subject and people are beginning to wonder what it is exactly that is making cryptocurrency become so popular.
Now that you understand what is cryptocurrency, perhaps you’d like to read more to find out if Bitcoin is a safe investment? Or read more on how to buy Bitcoin?
Beginners Crypto Guide aims to help you understand why crypto is becoming so popular and what all the fuss is about cryptocurrency. We hope you’ve gained an isight into the wonderful world of crypto, look around to learn more!
This is NOT financial advice. Beginners Crypto Guide does NOT OFFER formal nor informal financial advice and accepts no liability for this service. A qualified professional should always be consulted before making any financial decisions
2 Replies to “What is Bitcoin? What is Cryptocurrency?”
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