You may have heard of Bitcoin or Ethereum recently and wondered what it was. Both of these “cryptocurrencies” have been featured in the news frequently the past several months causing quite the stir. If you are wondering what all the excitement is about, you have come to the right place.
What are the Basics?
Both Bitcoin and Ethereum are virtual currencies known as cryptocurrencies. Cryptocurrency is named after the usage of cryptography in securely encrypting transactions. The most basic usage of a cryptocurrency is to send and receive monetary transactions in a decentralized fashion. Each unit of a cryptocurrency is known as a “coin” which is a virtual unit of currency independent of fiat cash. Cryptocurrencies are not tied to a single server or entity due to the implementation of a “blockchain”. The blockchain is simply a distributed list of all transactions that acts as a public ledger. This public ledger is important to avoid discrepancies and prevent duplicate transactions. The majority of the most popular cryptocurrencies utilize their own blockchain. Because cryptocurrencies are open source, anybody is free to create their own cryptocurrency by modifying an existing blockchain.
What is the Big Deal?
Cryptocurrencies are self-sustaining and operate globally without regulation under any government or corporation. The community is entirely responsible for development and maintenance. Thanks to their decentralized nature, cryptocurrencies provide benefits such as privacy, convenience, and low fees. Transactions transfer nearly instantly to anywhere in the world in an anonymous manner. The blockchain also provides revolutionary benefits in the speed and scalability of large network transactions. Blockchain technology is rapidly advancing as an emerging sector in finance and technology.
How Can I Become Involved?
Anyone can become involved with cryptocurrencies by purchasing their first coin from an exchange. Currently, the most popular cryptocurrency exchanges are Coinbase and GDAX. Coins can be purchased via USD or EUR via a credit card or bank account. Coins can be stored online via the exchange or stored offline in multiple formats. Additionally, newcomers can become involved in the community through online forums such as Reddit. For the technically inclined, most cryptocurrencies are active on sites such as Stack Exchange and GitHub.
Cryptocurrencies are a radical new invention with the potential to change the way we process transactions. There has never been a more exciting time to become involved and watch the technology mature. I hope you enjoyed this article, please stay tuned for more to come shortly!