What Is Cryptocurrency?: Here’s Your Ultimate Guide


Jack Israel, Senior Staff Writer

Cryptocurrency has become a dominant topic in our world, one many people have heard a lot about but many still don’t fully understand. Cryptocurrency revolutionizes the way goods and services are exchanged, and its technology might just transform our industries. You may be familiar with some of the more well-known types of cryptocurrencies like Bitcoin, Ethereum, and Dogecoin, but there are over 10,000 different forms of cryptocurrency in existence. Cryptocurrency can be used as a buying agent or it can be used as an asset (like a stock or commodity). However, before messing around with crypto, you should first learn exactly what it is. 

In simple words, cryptocurrency is a decentralized digital currency that is transferred through blockchain technology. Cryptocurrencies are able to run decentralized due to operating on blockchain technologies. Decentralized means that there is no central organization overviewing the transactions of cryptocurrency. Instead, the transactions go straight to whomever the transaction is directed. This makes it so that the government and other institutions are left out of the picture when it comes to making these transactions. In addition, it makes it so that transactions can be made at any hour of the day with minimal fees.

Blockchain is a digitized ledger that allows a network of computers to track transactions made in the crypto world. The list of transactions are known as blocks, which are connected to prior transactions on a growing chain. These ledgers are kept intact throughout various systems in the network where everyone has access to a copy. Blockchains are so secure because every transaction is authenticated by both sides of the transaction, authenticated by various other ledger holders, timestamped, added to the chain, and then left in the network permanently.

The growth of crypto has not only been rooted in the belief that it may become the future of money, but, it has also grown as it is very useful and the media has blasted a growing curiosity around it. First, crypto is super fast. A single transaction of crypto can take just a few minutes, while a typical bank transaction may take at least one day. Second, there are hardly any fees required to make a crypto transaction as there is no centralized establishment, whereas a bank or other centralized establishments may require a processing fee. Moreover, not having a centralized establishment grants more privacy. In addition, crypto is exceptionally secure, given the fact that all crypto transactions are completely anonymous, the network is overwatched by thousands of ledger holders, and once completed, the transaction is irreversible.

Hacking into someone’s bank account is as easy as guessing someone’s six digit passcode, while accessing someone’s cryptocurrency bank requires an individual to attempt to hack hundreds of thousands of uncorrelated computers at the same time. Still, as the growing phenomenon is still evolving, with the many hopes for cryptocurrencies come many concerns. Crypto cannot be reversed, so if you send an inaccurate transaction to someone, there is no way to dispute that transaction. And, if you lose your personal key, you lose all access to your crypto funds. Lastly, cryptocurrencies are incredibly volatile, which can make it very difficult to purchase goods and services with crypto as the prices of these goods and services would need to reflect the changes in the value of the currency. 

All in all, cryptocurrency is something that is impossible to ignore in today’s world and something to definitely keep an eye out for. Every day, we progressively hear more and more news about crypto because it can change the way our markets operate. Even though the ideas of what cryptocurrencies can bring to the table are still up in the air, they can ultimately bring unlimited potential to the inner workings of our future.