Why is Everyone Talking About Cryptocurrency?
In recent years, you may have heard words like Bitcoin, Doge coin, or cryptocurrency being used in conversations. But what do these words really mean?
First, let’s understand what cryptocurrency means. The “crypto” in cryptocurrency stands for cryptography, which is a method of using encryption and decryption to secure the data from the risk of third parties with alternative motives. Cryptocurrency is a digital currency through blockchain technology, used to buy and trade services, rare elements, goods, and even stocks. Cryptocurrency is a currency that only exists online.
““Bitcoin has no physical form - it technically exists online as a complete digital asset.”
The blockchain technology used to build cryptocurrencies is complex, recording all transactions as a “chain of blocks” (hence the name blockchain) used to timestamp all transactions. This complex technology is what makes it hard for third parties to hack people’s cryptocurrencies, making it also much safer to use for completing transactions.
Cryptocurrencies vs Digital Currencies
While cryptocurrency can seem to be a similar currency to digital currency, there is a main difference between the two.
Firstly, unlike cryptocurrencies, digital currencies are centered in a central site, such as a bank. Digital currency is also overseen by the government and is connected to a legal framework. Cryptocurrencies are not centered around banks or governments. Instead, some cryptocurrencies may be completely centered and controlled by the creator of the network. However, most cryptocurrencies have the majority of their communities governing the network. For example, in the same way that nobody owns the technology of email, nobody owns the Bitcoin network. These cryptocurrencies are controlled by the cryptocurrency users around the world. Although cryptocurrency developers may be improving the block-chain software and updating protocols, it is ultimately up to the users to choose what software and version they use.
