A cryptocurrency is an online digital currency that is secured using cryptography, which is where the name comes from.
Cryptocurrencies are a peer-to-peer medium of exchange that don’t require the input of anyone other than the sender and the receiver. You don’t need a bank or a third party company to send your money.
The Power of Cryptocurrency
When you are exchanging cash in person, only yourself and the receiver are part of the transaction. When you send money online you have to use a payment service or application that acts as a third party intermediary. It could be a banking website or a payment app like Venmo.
For many, the inclusion of a third party is intrusive, unnecessary and, in many cases, undesirable. Whether it’s a fee hike or a privacy violation, people aren’t into it.
That’s what’s great about crypto. It’s like just handing cash to your mate but you can do it across the world with consistent fees. If you send money across the world using a traditional money transfer method you’ll end up paying huge fees.
Crypto is Decentralized
Most cryptos are decentralized, meaning there are no central entity with control. This is a strong selling point.
Why does this matter?
Well, currencies like the US dollar can be issued by the Government at any time. That’s why inflation occurs every single year. Every day the value of your fiat currency ever so slightly decreases as the supply increases.
In contrast, cryptocurrencies (usually) have a finite supply. This means that the total supply is public knowledge and will never change.
That’s not all…
The upkeep of a decentralized cryptocurrency is managed by a network of people all around the world. This makes it very difficult, or essentially impossible, to hijack the network for malicious gain.
In other words, a decentralized network is arguably stronger and more secure than a centralized network, providing there are enough contributors.
Where does Bitcoin fit in?
Bitcoin is a cryptocurrency. It’s the most famous and valuable crypto there is.
Bitcoin has been around since 2009 – more than ten years. No one even knows who created Bitcoin. The network is strong and highly secure. Fees are low. Transactions are relatively quick.
All in all, Bitcoin fits the bill as a solid, reliable cryptocurrency. It’s a decentralized peer-to-peer digital cash. Bitcoin spearheaded the cryptocurrency movement and helped grow the space to where it is today.
Blockchain is the underlying technology that most cryptocurrencies use to control the network. Data is stored in an unbreakable chain of blocks. All transactions are final and the blockchain prevents false transactions from being completed.
The cryptocurrency world is a vast and dynamic place. Bitcoin is not the only cryptocurrency. There are cryptocurrencies for everything. Marketing, gaming, supply chain tracking, IP protection and so many more.
So… What is Cryptocurrency?
As we’ve covered, a cryptocurrency is a digital peer-to-peer medium of exchange. With cryptocurrency you can send ‘value’ anywhere in the world in a matter of minutes and avoid high fees.