What is Cryptocurrency?
What is Cryptocurrency?
It’s making major headlines, turning people into millionaires overnight. It’s exciting, it’s volatile, but what is cryptocurrency? Like the internet did thirty years ago, crypto is changing the way we buy, sell and invest worldwide.
Let’s cut through the technical lingo and break it down. Until recently, currency was controlled only by centralized governments. The US had the dollar, the EU had the Euro, and so on. That’s called a fiat currency. Although there are benefits to government-backed money, there are also downsides, such as inflation and devaluation which is out of the hands of the users, the every day people who depend on what they earn to live.
In 2009, when an anonymous person, or group of persons, under the alias Satoshi Nakamoto introduced Bitcoin, all that changed. Utilizing blockchain technology, Bitcoin was completely decentralized, with the data kept on user networks, creating a public ledger that is visible and verifiable, but also permanent and unchangeable. Rather than trusting a third party to house centralized servers, essentially giving them the keys to the kingdom and hoping they act ethically, keeping our personal data secure, accurate and accessible, Bitcoin put financial transactions into the hands of the people.
The security in the system lies in its decentralization and transparency. Essentially, a transaction is performed – say someone uses US dollars to buy some Bitcoins – a record of the transaction is created and spread throughout the system, recorded in the database of every node of the network. It is then irreversible and immutable, since changing the record on one node would be immediately identified. This is all done with complex encryption, earning the name, cryptocurrency.
What can I do with cryptocurrency?
Good question! You can use it like money with anyone that accepts it to pay for goods and services, and it’s even spawning new opportunities for investment and wealth management. As crypto becomes more widespread, there are an increasing number of both online and brick-and-mortar vendors who will accept digital currency as payment. Buy an app on Apple Store, pay for your coffee or fund your college education. While Bitcoin currently remains the most common coin, other digital currencies such as Ethereum, Steem, Litecoin, Lisk, Ripple and Dash are gaining ground.
How do I get started?
It can be overwhelming, for sure. Many get convinced to take the plunge, step onto the diving board, look down into the water, decide it’s too deep and step off again. That’s why an investment vehicle like Cred is the perfect way to dive in. We have hand-selected coins that surpass our intensive investigation and strict criteria for legitimacy, utility, mission, legal standing and more. Our easy investment options make this exciting new asset class accessible, affordable and at your fingertips.