What the heck is cryptocurrency? - A simple guide to crypto

Until it was simply explained to me like this.

Cryptocurrencies are mediums of exchange. They are a means of carrying out transactions digitally. It is a virtual currency completely independent of government control, or any entity, any one server or central authority.

Supply and demand is all economy. It is the same with crypto.

Gold has and will always be valuable because it is desired by people and has a limited supply. There is only a certain amount of gold in existence. We could mine for more gold in the ground, but the more years that pass the more difficult and expensive it becomes to source and mine gold.

Because of the golds limited supply and desirability, that makes the value of gold higher. It is the same with cryptocurrencies just like Bitcoin.

Bitcoin was created by Satoshi Nakamoto, a person who is yet to be identified. (Which makes the whole crypto thing even more strange, I know). Satoshi Nakamoto, created this system, a transfer of digital currency as a response to the financial crisis in 2007-2008.

Bitcoin is one of the most popular and largest currencies on the market and the first decentralized cryptocurrency. Bitcoin is desired by people because it transactions cut out the middle-man, such as banks who add service charges and fees. The government cannot control it. The people are in control of it and there are heaps of people who accept them.

Cryptocurrencies are limited in quantity and there is usually a cap on how many can be mined. Which can vary from cryptocurrency to cryptocurrency.

So how can this be safe and secure? How does it do all this? The blockchain!

Think of it like this, if Bitcoin is email, then blockchain is the internet. The blockchain is a public ledger of all transactions that have occurred on the peer to peer network. It is one huge record book and as long as transactions continue to be made the ledger will continue to build and grow on itself. This is why it is called a chain.

Instead of one person controlling everything, there are thousands of computers around the world connected to a network which all come to an agreement of which transactions are valid. Because this ledger is made public to everyone and continues to be synchronized all over the world it will always share the same information on it.

Cryptography is used to secure transactions preventing fraud and to create new coins, which are given to the people who solve complex maths problems "miners". Its the miners job to confirm those transactions and are reward coins for completed blocks and just like gold, limited supply, and desirability, that makes the value increase.

To be able to have a transaction take place in the first place, you need a digital wallet. Digital wallets have two very important things, a private key and a public key and they play a very important role in the cryptography.

Digital wallets

Not all digital wallets hold all types of digital coins and tokens and with many different "altcoins " (alternatives to bitcoin), available like Ethereum, Litecoin, Doge and NYC Coin, it is important to do your research into what wallet you require for your coin of choice. Some digital wallets I personally use are:

- Coinbase

- Jaxx

- Coinomi

Always back up your keys and don't lose them! Your keys are your own personal identifier or digital signature. To make your transactions securely encrypted and authentic they need to have both keys involved.

So where can I get my crypto?

There are 2 types of exchanges. The first is a Fiat Exchange. Fiat exchanges allow you to buy cryptocurrency with fiat money (dollars, euros, pounds, etc.).You can make payment with a bankcard, credit card, and cash.

The second type of exchange is called an “altcoin exchange”. These exchanges don’t deal with traditional payment methods like credit cards and banks.
Instead, altcoin exchanges require that you deposit cryptocurrency and then you can trade the cryptocurrency you deposited for other coins and altcoins.

Alternatively, you can source airdrops for free coins. Airdrops have different terms and conditions for collection depending on coin or token. Sign-Up is simple and usually very straightforward.

Talking about FREE COINS, I have found some amazing discord groups like the @nyc.community Discord group where the community rains free NYC coin to its users all day and night.

If you don't want to get wet in the crypto rains or you are wanting to stack up on some NYC before the fork visit https://nycflash.me.
Payments are simple and can be made by paypal or creditcard.

I have written many posts about NYC coin, my newest favorite coin, although humble in value today many are holding hope it is destined for amazing things and with a growing number of merchants daily, they are certainly headed in the right direction. Remember the whole supply and demand thing?

Check out my blog for more read ups on NYC coin or visit the discord server.

Well, that is all from me for now. I hope I was able to help those still trying to wrap their heads around crypto and at least spark enough interest for you to look into crypto further.

I am not a financial planner. I am just a mum who discovered cryptocurrency and like the concept of a decentralized exchange and wanted to find out more about the "computer money" people were talking about.
Please do your own research to determine what investments are the right investments for you.

Want to check out some of my usual posts and adventures?

https://steemit.com/@mumma-monza

Proud mum and member of the @Steemitmamas discord group. The coolest hangout for Steem mama's! #steemitmamas connects all mamas from across the globe.

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