What is Cryptocurrency & Blockchain — keeping it simple stupid
Cryptocurrency has been around for a while now but got serious hype and attention in 2021 alongside the web3, nfts, and the likes. And now a lot of people trying to get into the space and learn more about it but don’t know-how.
This article is like a brief introduction to cryptocurrency and blockchain and at the end of the article, you should have an idea of what they’re. I also dropped a few cool links.
Table of Content
- What is Cryptocurrency?
- A Brief History
- Why You Should Care About Cryptocurrency
- What is Blockchain?
- Resources to learn more.
What is Cryptocurrency?
Cryptocurrency derived its name from cryptography and currency.
Therefore, Cryptocurrency is a form of digital cash (just like we have physical cash- notes, coin etc) we can use to make transactions, shop online, buy food and so on. This can be done from anywhere in the world.
The best part about cryptocurrency is, it not owned by an individual or an organization like our traditional financial institutions. This mean you interact directly with crypto through a free software when you want to make transactions out to friends, pay for a service, etc; unlike traditional banks that perform transactions on your behalf.
Brief History of Cryptocurrency and Invention of Bitcoin.
No one really knows who invented the Bitcoin (the original cryptocurrency) even up to date. There has been a couple of rumors about a Japanese monk who stays deep in the mountains is who invented the bitcoin — I’m just kidding.
What we do know is the name attached to it, which is Satoshi Nakamoto. Satoshi could be a an individual, a group of programmers, a high school nerd, or even an alien hidden in area 51.
Satoshi published a 9 page document in 2008, detailing how bitcoin worked. In 2009, the software itself was released.
Bitcoin can be said or is the foundation on which other cryptocurrencies are built. One thing to note is that all cryptocurrencies are different. Some are more secure than others, some are private,some are programmable. But we won’t get into it in this article, you can do your research or use the resource links at then of this article.
Why You Should Care About Cryptocurrency
At this point you are wondering why you should care about bitcoin and cryptocurrency when you already have apps to perform transactions with. Well, you should care because its:
- Decentralized — Unlike centralized financial institutions, who can freeze your account, delay your transactions etc, Cryptocurrency on the other hand is free to use, permission-less and not owned by anybody. You interact directly through a free software or app to do your transactions.
- Highly Secured — The way the crypto network is designed, it is IMPOSSIBLE for hackers to steal your coins and this is because of cryptography — Using mathematical theories and computation to encrypt and decrypt data.
- A Fast Payment Method — When you do a transaction from anywhere in the world, Let’s say you want to send some bitcoins to your friend in The Netherlands, he/she receives it in seconds.
- It Is Cheap — There are no transaction fees attached to crypto because the miners are being compensated for their network. Since most users like you and me would use a third-party platform such as Coinbase or Binance, would charge a small fee in order to maintain their platform and your crypto wallet. It is still way cheaper than bank’s international transaction fees.
These are some things you need to know about cryptocurrency. Remember to check out the links at the end of this article to help you learn more on this topic.
What is Blockchain?
I know it sounds complicated and technical but not to worry, the reason for this article is to explain this concept in its simplest form.
Blockchain is just a database. These databases are not as complicated as ut sounds. It is just like building an excel spreadsheet. Although, there are some unique features of these databases.
Firstly, all data on the blockchain is linked. This means when a new entry is done (called a block), this block is cryptographically linked to the last block or entry. Each new block contain a sort of digital fingerprint of the last one.
since each fingerprint points back to the last one, you end up with a chain of block. Hence “Blockchain” — pretty cool right. Think of it as a tweeter thread.
Secondly, blockchain is append-only. You can only add information — you can’t just delete or change data as you like.
Lastly, blockchain is immutable. You can’t alter any information on the blockchain without everyone noticing and this is thanks to the digital finger print every new and last entry has. It’s all connected.
Cryptocurrency and Blockchain is the future.
THE BLOCKCHAIN KEEPS EVERYONE HONEST, AND A WHOLE LAYER O OF BANKING BUREAUCRACY IS REMOVED, LOWERING — PAUL VIGNA
All that is left is public acceptance and with the rave of web3, only time would tell.