What is Cryptocurrency - Explained

History of Cryptocurrency

The very first cryptocurrency that was invented is called Bitcoin by the developer Satoshi Nakamoto whose real identity is yet to be revealed. There are speculations to what country he is from, if his name is real, who he really is and what he looks like. Nevertheless it's said that he owns 1 million coins of his Bitcoin digital currency which is equivalent to 2.7 billion USD.

Nakamoto's invention is the first digital currency to prevent any double spending errors without a "Central Authority." What this means is that people can make transactions with each other without going through a server or banking service all while using digital currency online.

For example, say you bought a product from Amazon with your credit card. On your monthly statement you see that your card was charged twice for the same product. In this case you would call your credit card company (The "Central Authority")to dispute the transaction. You would get it figured out in minutes or you would be talking for an hour. Anyway, in the case of Bitcoin and cryptocurrency, the Central Authority (Credit Card Company) would not exist. Just your own money and Amazon. One-to-one transaction.

So how do you prevent double spending with online currency in the case of no middle man? Keep reading.

What is Cryptocurrency

Like I said before, cryptocurrency is digital money that can be used for purchasing products or services online without any middle man. But how does it work?

Before Nakamoto's Bitcoin, it seemed impossible to create such a digital currency like this until he introduced what is called a blockchain. Think of a blockchain like a financial spreadsheet. But instead of just you being able to see it, the whole internet can! Scary? Not so much because your wallet account information is still protected. (A wallet is a site or software program that holds your cryptocurrency) So if you sent money in the form of cryptocurrency to a friend across the globe in a matter of 10 seconds (Which you can do by the way) the whole world could see that transaction. Check it out for yourself here: Blockchain

Just like any currency, this cryptocurrency can be exchanged into any other forms of currency. This can be done through exchange websites or even some wallet websites have this feature. For more information on wallets and exchanges click here. For my personal use, I prefer Coinbase which can be found here.

Types of Cryptocurrency

Back in 2009 there was only one cryptocurrency at the time and that was Bitcoin. However up to present day there is now 800+ different cryptocurrencies with obviously Bitcoin still being the most popular and highly valued currently at $2521.96 USD per 1 Bitcoin (At the time of this post).

These cryptocurrencies are similar in function using the blockchain method however they differentiate in how they can be earned, what they are valued at, as well as exclusives to specific ones. I don't know when or where some of you might be reading this but the website this post is published on is using the cryptocurrency Steem (STEEM). I had to throw that in there. :D

Whichever cryptocurrency you use is completely up to you, just know that the more popular ones will likely have more selection of different online wallets to use as well as be accepted at more places.

Uses of Cryptocurrency

The uses of cryptocurrency vary per user but are still functioning just like regular material currency. Although cryptocurrency isn't yet considered a primary currency anywhere currently, you can still make purchases online with it. There are numerous popular websites that except Bitcoin like WordPress, Microsoft(Depending on item), Reddit, and Steam.

The uses are rapidly growing; similarly to that of paper money by making stores and businesses digital currency friendly. A progression will occur when we may completely switch over to digital currency and then cryptocurrency.

How to Obtain Cryptocurrency

So you may be wondering... How do I get involved in cryptocurrency and how do I obtain my own cryptocurrency? This website we are on (Steemit) is a great way to start. But from the very beginning of the cryptocurrency and especially Bitcoin, people would "Mine" for Bitcoin. I won't go into depth on mining for Bitcoin but to put it simply, it's when a computer or group of computers solve algorithms and return get compensated through Bitcoin. If you want further info then look here.

There are other ways to earn Bitcoin and cryptocurrency like doing freelance work for other people or businesses, trading for it on markets, or accepting it as a payment. There are certainly more ways to earn cryptocurrency, but these are just a few more well-known.

Future of Cryptocurrency

This portion is opinionated to my view on where this community turn-based into a new standard is going. I personally think that cryptocurrency is the future of the global economy. As with other crypto investors, I think that this form of payment will become something bigger than imagined and become the new standard for how we make transactions. I'd also like to say that as this currency begins to grow and more users get involved into this currency the less likely they will be finding themselves in need of paper money. If you'd like to look into the facts about how cryptocurrency could explode and the price of certain currency could skyrocket then look here or here.

Final Thoughts

Thanks for everyone who read this far and if you found this post useful or helpful in any way I'd appreciate a vote or a comment with any thoughts you might have to add!

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Thanks everyone!

-Isaac