Cryptocurrency for dummies
Economics runs the world, our life depends on its war, and revolutions all hinge on it. Which itself rests on one concept of money.
The ultimate catalyst for the worst and the best of human endeavor, money defines our social status. It also compromises our morals. We spend our lives chasing these rectangular pieces of paper. Some are willing to fight and kill for it. But are we headed towards the end of money as we know it?
Do we have to burn our fiat dollars and euros to transform every penny we have into digital binaries, or say cryptocurrency?
Is it really the new future of money, or is gambling a recipe for financial disaster?
Let me try and answer the above question!
What the internet did for information, cryptocurrency is doing for money.
It is revolutionizing transactions and eliminating banking.
Everyone is talking about it, still not many don’t understand cryptocurrencies.
The problem lies in the fact that most of us do not understand money, and its handling, a life skill we were not taught in school beyond basic computing, now as money is changing its form the first thing we have to do is try to do is understand what money is and that’s what am going to do throughout this article and if you’re worried that am going to get too technical.
It’s all plain English let’s start with understanding three basic concepts
- Bitcoin
- Blockchain
- Cryptocurrency
Bitcoin is the name of the best-known cryptocurrency like the euro is the name of one type of currency bitcoin is digital and decentralized. It exists electronically, and it’s computer code only.
Cryptocurrency is a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.
Crypto means data encryption. It basically ensures the security of transactions. You may have heard about your messages being encrypted, it means they’re secure. It’s the same for crypto, it’s encrypted data, but unlike debit and credit cards, cryptocurrency has no physical counterpart.
It only exists on the Blockchain, a technology that enables the transactions of cryptocurrency. Think of it as a computer file that stores data, but this file is across a vast network of computers, and it’s not exclusive to bitcoin and cryptocurrency.
Blockchain technology has many use cases. So simply put, this is everything we don’t understand about money combined with everything we don’t understand about technology.
Don’t lose your head if you do not get it because most people don’t, and surveys have shown that 1/10 people understand how cryptocurrencies work, and 1/3 crypto investors understand it themselves.
Bitcoin, for instance, no one even knows who developed it, and it has been in circulation since 2009, but the identity of its creator or creators remains a mystery to this day.
Why is crypto is the ultrasound form of money?
Nakamoto is just a guy trying to build money for the internet just like every other person in the past tried. His was different because he solved a potential flaw in digital banking, double-spending. Let me explain, if a person buys a sandwich worth ten dollars, for instance, they cannot spend that same ten-dollar bill anywhere.
But when the same amount is paid digitally, some people can manipulate systems and spend the same ten dollars more than once, and that in simple words is double-spending.
To stop this from happening, bank and credit card companies acting as middlemen, they vouch for the transactions you make, and they prove that you’ve already paid for something at the same time they take their own cut of the transactions.
- But Cryptocurrencies solve both these fiddly problems. It’s decentralized, meaning there is no third-party control.
- It’s regulated by its own community of users, and all of them record all transactions.
- No single user or government or bank or credit card company can force a fee on payment.
Encrypted, international, intangible, unstoppable.
Cryptocurrencies are secure from the effects of currency debasement and inflation. Well, it's volatile. The value keeps fluctuating. On the 15th of April, 1BTC was worth $63,000on the 25th of April, it sank below $50,000.
Why does this happen?
The prices of different cryptocurrencies are driven by demand and supply. When the demand increases — the price goes up — when people see the price going up, they feel like cashing in. So they try to sell, this leads to more people wanting to sell when there are not enough buyers they lower their price.
Encrypted, but!
The digital wallets containing cryptocurrencies are stored on phones and computers, and we all know how vulnerable these are to theft and hackers. So if you have a good amount of money invested in cryptocurrencies create passwords that are difficult to guess, also stop visiting those weird and suspicious websites.
That's it.
Head over to comiblock.com to start investing cryptocurrency exclusively like a hedge fund.
