What exactly is a cryptocurrency?

At its most basic level, Bitcoin is decentralized digital money that can be used over the internet. Bitcoin was the first cryptocurrency, launching in 2008, and it is still the most popular, influential, and well-known. Since then, Bitcoin and other cryptocurrencies such as Ethereum have gained in popularity as digital alternatives to government-issued money.

Bitcoin, Ethereum, Bitcoin Cash, and Litecoin are the most popular cryptocurrencies by market capitalization. Tezos, EOS, and ZCash are three other well-known cryptocurrencies. There are some that are similar to Bitcoin. Others use alternative technologies or have additional features that enable them to do more than just transfer value.

Crypto allows value to be transferred online without the use of a middleman such as a bank or payment processor, allowing value to be transferred internationally, near-instantaneously, and for cheap fees 24 hours a day, 7 days a week.

A government or other central authority does not normally issue or control cryptocurrencies. Peer-to-peer networks of computers running free, open-source software are in charge of them. Anyone who wishes to participate can usually do so.

How is crypto secure if no bank or government is involved? It's safe because all transactions are verified by a blockchain technology.

The balance sheet or ledger of a cryptocurrency blockchain is comparable to that of a bank. Each currency has its own blockchain, which is an ongoing, constantly re-verified record of all transactions conducted with that currency.

Unlike a bank's ledger, a crypto blockchain is shared by all members of the digital currency's network.

It is not controlled by any company, country, or third party, and anybody can join. A blockchain is a ground-breaking technology that has only recently been made possible by decades of computer science and mathematics breakthroughs.

Key concepts

Transferability

Transactions with folks on the other side of the world become as simple as purchasing with cash at your local grocery shop.

Privacy

When you pay with cryptocurrency, you don't have to give the seller any unnecessary personal information. This implies that your financial information will not be shared with third parties such as banks, payment services, advertisements, or credit-rating agencies. And, because no sensitive information is sent over the internet, there is very little chance that your bank information will be compromised or your identity will be stolen.

Portability

Because your cryptocurrency holdings aren't connected to a financial institution or government, you can access them no matter where you are in the globe or what happens to any of the main intermediaries in the global financial system.

Transparency

Without exception, every transaction on the Bitcoin, Ethereum, Tezos, and Bitcoin Cash networks is made public. This implies there's no opportunity for transaction manipulation, manipulating the money supply, or changing the rules in the middle of the game.

Irreversibility

Cryptocurrency payments, unlike credit card payments, cannot be reversed. This greatly minimizes the chances of being cheated by vendors. It has the ability to make commerce more affordable for customers by removing one of the main justifications credit card firms use to justify their high processing costs.

Safety

Bitcoin's network has never been compromised. The underlying concepts of cryptocurrencies also contribute to their security: the systems are permission less, and the main software is open-source, allowing a large number of computer scientists and cryptographers to investigate all parts of the networks and their security.