Everything You Need to Know About Crypto
In this article we’ll provide all the foundational knowledge necessary to start forming your own ideas about crypto. From what it is and how it works, to its history and future.
What is cryptocurrency?
Simply put, cryptocurrency is a digital currency that uses cryptography to secure transactions. Cryptocurrency is decentralized, meaning it isn’t subject to government or institutional control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009 as a peer-to-peer electronic cash system. Since then, dozens of other cryptocurrencies have been created with various purposes and functions.
How does cryptocurrency work?
If you think about it, the way you make purchases with credit and debit is somewhat remencit of crypto. You're not actually moving money from your bank account to a merchant's bank account. Instead, your bank keeps track of a virtual ledger, moving money around without taking up physical space. This method of payment is not limited to credit card transactions—you can use it for PayPal and any other online transactions you make.
In the world of crypto there’s no institution tracking your cash, and there’s also no physical money sitting around in safes. Instead, your account balance is tracked using a decentralized leger; it's distributed on the blockchain. This ledger is updated and maintained without a centralized authority i.e. a bank.
A brief history of cryptocurrency
Cryptocurrency is often thought of as a new invention, but the reality is that its roots go back much further than that. In fact, cryptocurrency can be traced all the way back to the early days of computing. One of the first examples of cryptocurrency was developed in 1983 by David Chaum, an American computer scientist. He created a system called Ecash, which was based on cryptographic algorithms and allowed users to make anonymous transactions online. While Ecash never became widely used, it did lay the groundwork for many of the crypto systems that we use today.
What is the future of cryptocurrency?
If you ask anyone on the street what cryptocurrency actually is, they’re likely to give you a blank stare. Even though cryptos have been around for over a decade now, they still remain largely unknown to the general public. That being said, those who are familiar with cryptocurrencies are very optimistic about their future. That’s because the technology behind them (what some call Web3) is about to transform everything from how we experience content to how we fund government projects and everything in between.
