I’m so excited about my first blog post on this topic. I’m sure just like me you have a lot of questions about crypto and find this subject to be a bit confusing but are eager to learn.
So, let’s start with the basics and make this as easy as possible.
What is cryptocurrency??
Cryptocurrency (sometimes referred to as crypto) is a digital or virtual way of doing secure money transactions by using cryptography. There is no physical currency (meaning money that you can hold in your hands does not exist) or hardcopies (printed papers) of any money transactions.
The word “crypto” in cryptocurrency literally means concealed or secret. Similarly, the word “Cryptography” means “secret writing”— to put it simply… it’s the ability to exchange messages that can only be read by the person who receives it.
What makes cryptocurrency so secure is that it uses cryptography (a mathematical and computational practice of encoding and decoding data) to secure its money transactions.
All the digital entries of these money transactions are stored on an online database and recorded in a blockchain public ledger so it's viewable for anyone to see. (More about blockchains in future posts.)
The benefit of a public ledger is the transparency and trackability of all transactions without revealing the crypto owner of that currency. The identity of the owner stays completely anonymous – reason why it’s called CRYPTOcurrency.
By having a public ledger, it creates a trail that makes the entire financial history public information and (THE BEST PART) impossible to falsify.
Every single transaction that takes place for a cryptocurrency is accessible to anyone if they choose to see it. This includes information such as the wallet addresses used for sending and receiving money (more about wallets in future posts), including the date, time, and value of each transaction and so much more. The only thing that isn’t obtainable is the identity of the person or people behind those crypto transactions.
Some of the big reasons why cryptocurrency is getting so popular is the direct person to person system which allows you to send payments anywhere without use of a centralized system that’s governed by someone else.
So, imagine being to send money to a friend or relative from US to India in a matter of seconds. All done directly from your phone without the involvement of banks or government and without the headaches of currency conversion to change it from dollars to rupees.
That’s not all…
There are also no hefty international transaction fees imposed by banks or brokers. Also, no delays by days or weeks in settlement times or a requirement for minimum payment. Lastly, the only people that know the identities behind these transactions are you and the person who received your money.
Crypto & Pro$per
P.S. I would love to hear from you. Comment below and feel free to share your crypto thoughts.