What is Cryptocurrency, How Does it Work and Why Do We Use It?

You might have heard of Bitcoin. It is a digital currency that was created in 2009 by an anonymous person using the alias Satoshi Nakamoto. So what exactly is a Bitcoin?

It allows you to make transactions without a middleman – meaning you have full control over your transactions. Along with Bitcoin, however, there are many other cryptocurrencies available. 

The Basics of Cryptocurrency

For years, people have traded assets for goods.  Today, those assets are mostly currencies – normally printed bills or coins. The currencies circulating today are all administered by centralized authorities such as governments or central banks.

The launch of Bitcoin, however, partially changed how the world viewed money. For example;

What if currency were monitored and regulated by math rather than by governments?

There are several types of cryptocurrencies with many functions. Besides these features, these cryptocurrencies are supported by a decentralized network, called the blockchain.

Blockchain technology assures that all cryptocurrencies are kept in track, regardless if they are being held in a digital wallet or used for trading. Of course, running any type of system like this requires an infrastructure that makes sure that no one is trying to game the system. 

For example, Bitcoin was the first cryptocurrency to market, creating a system where the peer-to-peer network, so the sender and the receiver of tokens/coins, must create a digital signature to sign off on these payments.

Continue Reading …