What Is Cryptocurrency And Why You Should Care About It Now?
Updated: Jun 12, 2021
In the last 5 years, you must have heard about the record-breaking spree of bitcoin, how it made several millionaires in a short span of time, and how a lot of people lost a lot of money in its volatile market.
If you are already aware of the world of cryptocurrency, then it's great but if you are still thinking what the heck is a cryptocurrency and why people care about it?. Then this is the right place to start.
Cryptocurrency might seem like a complicated topic to dive into, especially for beginners but it’s something we should all be paying attention to. Many well-known investors and financial organizations have already stated a lot about the potential of cryptocurrency and how it can impact the future of financing in the world.
“The bigger thing with bitcoin is not bitcoin itself, but what does that decentralized technology really do?.” - Ashton Kutcher, actor, entrepreneur
So let's take some time to understand cryptocurrency and its powerful potential. Don't worry here’s everything you need to know.
In the most basic way, what the hell is cryptocurrency?
Cryptocurrency is a digital currency that uses cryptography (a way of scrambling up normal text so it can only be understood by the intended person) to make your transactions secure.
Or if talking in little technical jargon, cryptocurrency is a blockchain-based platform that is meant to be completely decentralized. As a financial-based blockchain, that it's not meant to be governed by any kind of central bank or authority. It is maintained by a peer-to-peer community computer network made up of users’ machines or “nodes”. If you know what BitTorrent is, the same principle applies.
Now we have some idea about cryptocurrency, but what is blockchain?. Let's find out more about it.
What is blockchain and how it's related to cryptocurrency?
The blockchain is where all of the crypto information is stored. Or in other words, it’s a digital ledger, or a means for recording data, that tracks every single transaction ever made.
At its most basic level, blockchain is just a chain of blocks. When we say the words “block” and “chain” in this context, we are actually talking about digital information (the “block”) stored in a public database (the “chain”).
“Blocks” on the blockchain are made up of digital pieces of information. Specifically, they have three parts:
1. Blocks store information about transactions like the date, time, and amount of your most recent transaction.
2. Blocks store information about who is participating in transactions. Instead of using your actual name, your purchase is recorded without any identifying information using a unique digital signature.
3. Blocks store information that distinguishes them from other blocks. Much like you and I have names to distinguish us from one another, each block stores a unique code called a “hash” that allows us to tell it apart from every other block.
Now we have some basic ideas about cryptocurrency and blockchain technology, let's go to some exciting parts and find how to get cryptocurrency.
How can you buy a cryptocurrency?
There are a few options out there in the market to buy cryptocurrency. The simplest and most common way, you can find an exchange like Coinbase, CoinDCX, Binance, WazirX, etc that converts your currency into a big-player currency like Bitcoin or Ethereum, or Litecoin. From there, you can trade them into one of the many other coins out there. Another simple way is to set up a virtual wallet with applications like Atomic Wallet and trade in some of your currency there.
In case you might have heard about Bitcoin mining. There are people all over the world who mine for bitcoins, or other cryptocurrencies, are basically being rewarded for lending their computer-processing power to the blockchain. You can also try to become a Bitcoin miner, although it has its own set of challenges.
Since we have already touched bases with the basics of the world of cryptocurrency, the next and important thing is to understand why all these matters and why you should care about all this.
Why you should care about cryptocurrency?
Despite volatility, cryptocurrencies are gaining a good hold in the world of finance. Many major companies are now accepting Bitcoin as a form of payment. Many large banks are now spending money and collaborating with existing crypto clients (JPMorgan with Zcash) or developing their own cryptocurrency. The more this type of currency is embraced by the market, the more value it has.
Cryptocurrency has the power to turn everyone into their own bank which can translate to no further annual fee plus could drastically reduce costs for banks and credit card companies that are drowning under the weight of record-keeping. The cryptocurrency is still the new kid on the block. With the reformation of any industry, digital technology is accelerating cryptocurrency growth at ever-increasing speeds. It might be an eventful ride that is not ending anytime soon and cryptocurrencies will likely become a standard, important part of the world-financial ecosystem soon.
We hope, we have given good enough reasons for you to start thinking a little bit more about cryptocurrency. Thank you so much for reading this article, please feel free to leave your feedback.
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