Here’s a story…Long long ago, it all started out as trade by barter, then unto cowries, coins and gold bars. Then finally paper came about. Followed by credit and or debit cards mostly either issues or controlled by Governments and Corporate bodies. That’s the popular story of money we were taught in school. But that’s not what money is currently, nowadays money is not only digital -as in unseen, something you can’t hold in your hands – but in code, hash tags and programming formats. It’s mostly known as cryptocurrencies and also majorly issued by a group of ‘ordinary’ individuals.
A Cryptocurrency is a digital currency or a decentralized digital money that is based on a Distributed Ledger
Technology (DLT) called a blockchain and also secured by cryptography. There are different types of cryptocurrencies, the most familiar ones being, Bitcoin and Ethereum.
The first cryptocurrency ever was Bitcoin and it was launched in 2008 by Satoshi Nakamoto. True story, nobody knows who Satoshi Nakamoto is or where he disappeared to thereafter but till date, his creation -bitcoin, is still the most popular and the biggest cryptocurrency and it has grown to be a digital substitute to money issued by the government.
Cryptocurrency can be used to buy goods and services. You can even create and issue your own cryptocurrency and once me, your uncle and your dog agrees to it, it becomes a legal tender we can use to transact business. That’s how powerful cryptocurrency is. Hence most governments worldwide are against it. We, the people can now create and issue our own legal tender (money) taking complete control and power.
Most people invest in cryptocurrency because it serves as an extra source of income just like other assets. But purchasing it may likely be risky because one need to research to have a knowledge of how the system works.
How Cryptocurrency works
Cryptocurrencies are given rise to through a process called “mining”. Crypto Mining is the process of generating single blocks added to the blockchain by resolving complex problems to generate coins. The reason for mining is to verify cryptocurrency transactions. Cryptocurrency transactions are sent from one address to another using a software called “Cryptocurrency Wallets“. The individual generating the transaction uses this wallet software to send balances from one account to the address of the receiver. This transactions are then documented on the public ledger through a process called “mining” (explained above).
How does one trade cryptocurrency? Cryptocurrency can be traded in so many ways. You can trade money for cryptocurrencies, you can exchanges goods and services like gold, etc. You can also trade cryptocurrencies for other cryptocurrencies. Please be informed that cryptocurrency prices tend to be volatile. Anyone who trades or invest in cryptocurrency should be ready to lose almost everything they put in.
Advantages of cryptocurrency
Speed of exchange: Cryptocurrency transaction is very fast. You don’t need to spend up to 24 hours or even queuing in banks to make payment, you can make your payment so fast in your comfort zone.
Accessibility: Cryptocurrency is available for everyone. All you just need is a smart phone or a computer and an internet to start with.
Security: Cryptocurrency is very safe and secured, no one can access your funds unless someone gets access to your crypto wallet key.
Disadvantages of cryptocurrency
Of course there are several disadvantages of cryptocurrency. These are the disadvantages Scaling Problems, Cryptocurrency Value and Volatility (the price is up today and tomorrow its rock bottom), Lack of Proper Regulation (Its an all comers affair. You too can create your own crypto), Worries About Changing Technology.
There that’s that about cryptocurrency, at least the basics. You can do so many other things with cryptocurrencies apart from buying and selling or trading. Cryptocurrency is programmable money. Imagine you paying me in cryptocurrency for my digital marketing book and automatically without me lifting a finger you get a copy of it sent to your email, house or office address and even be able to unlock online trainings attached to the book. That’s some of the extend cryptocurrencies can go.
As time goes we’ll explore more practical ways and solutions to this cryptocurrency world. Meanwhile join our Telegram group to learn more about cryptocurrency.
