Cryptocurrency
A cryptocurrency (or “crypto”) is a digital currency that can be used to buy
goods and services but uses an online ledger with strong cryptography to
secure online transactions.
1. What is cryptocurrency?
Cryptocurrency is a digital currency that can be exchanged online for
goods and services.
Many companies have issued their own currencies, often called tokens, and
these can be traded specifically for the good or service that the company
provides. Think of them as you would arcade tokens or casino chips.
You’ll need to exchange real currency for the cryptocurrency to access the
good or service. Much of the interest in these unregulated currencies is to
trade for profit, with speculators at times driving prices up.
Blockchain
Cryptocurrencies work using a technology called blockchain. Blockchain
is a decentralized technology spread across many computers that manages
and records transactions. Part of the appeal of this technology is its
security.
A blockchain is an open, distributed ledger that records transactions in
code. In practice, it’s a little like a checkbook that’s distributed across
countless computers around the world. Transactions are recorded in
“blocks” that are then linked together on a “chain” of previous
cryptocurrency transactions
How does Cryptocurrency work?
A cryptocurrency is a medium of exchange that is digital, encrypted and
decentralized. Unlike the U.S. Dollar or the Euro, there is no central
authority that manages and maintains the value of a cryptocurrency.
Instead, these tasks are broadly distributed among a cryptocurrency’s users
via the internet.
“Imagine a book where you write down everything you spend money on
each. “Each page is similar to a block, and the entire book, a group of
pages, is a blockchain.”
With a blockchain, everyone who uses a cryptocurrency has their own
copy of this book to create a unified transaction record. Software logs each
new transaction as it happens, and every copy of the blockchain is updated
simultaneously with the new information, keeping all records identical and
accurate.
To prevent fraud, each transaction is checked using one of two main
validation techniques: proof of work or proof of stake.
2. How many cryptocurrencies are there?
More than 6,700 different cryptocurrencies are traded publicly. And
cryptocurrencies continue to proliferate, raising money through initial coin
offerings, or ICOs. The total value of all cryptocurrencies on April 13,
2021, was more than $2.2 trillion and the total value of all bitcoins, the
most popular digital currency, was pegged at about $1.2 trillion.
What is Bitcoin? (most popular)
Bitcoin is a decentralized digital currency that you can buy, sell and
exchange directly, without an intermediary like a bank. Bitcoin’s creator,
Satoshi Nakamoto, originally described the need for “an electronic
payment system based on cryptographic proof instead of trust.”
Each and every Bitcoin transaction that’s ever been made exists on a public
ledger accessible to everyone, making transactions hard to reverse and
difficult to fake. That’s by design: Core to their decentralized nature,
Bitcoins aren’t backed by the government or any issuing institution, and
there’s nothing to guarantee their value besides the proof baked in the heart
of the system.
“The reason why it’s worth money is simply because we, as people,
decided it has value—same as gold,” says Anton Mozgovoy, co-founder &
CEO of digital financial service company Holyheld.
Since its public launch in 2009, Bitcoin has risen dramatically in value.
Although it once sold for under $150 per coin, as of March 1, 2021, one
Bitcoin now sells for almost $50,000. Because its supply is limited to 21
million coins, many expect its price to only keep rising as time goes on,
especially as more large, institutional investors begin treating it as a sort of
digital gold to hedge against market volatility and inflation.
Discussion part:
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Do you use bitcoin or any other cryptocurrency?
Do you have a wallet?
Use it for fun or as an early investment?
Do you believe this is the future (replace banks)?
Planning on investing but too risky?
Do you believe in it as a new currency?