What is Crypto?

May 5, 2023
Tweet category: Crypto

Crypto. . . We seem to be exposed to this term more and more frequently. So what is it and what's all the fuss about?

Well-known names such as Elon Musk have even commented on the use of crypto and how it will impact our lives in the near future. 

This is not meant to be an in-depth article about crypto, but more of a simple overview. Think of cryptocurrencies as a type of digital currency or digital money that uses a technology called cryptography. It's like regular money, but instead of being physically issued and controlled by governments or banks, cryptocurrency is digital and controlled by a network of computers that work together to ensure the security of your crypto. Crypto can be thought of as a digital token that can be used as a form of currency where all transactions are recorded on a public ledger called the blockchain.

The public ledger does not show any personal details but simply records the transaction. Imagine you and your friends have a shared notepad where you write down all the money transactions made between your friend and yourself. When you lend money or pay for something, you write it down in the notepad, and anyone who reads the notepad can see the entries. This is the concept of a public ledger.

To take this one stage further, instead of just one notepad, imagine there are many identical notepads holding exactly the same information and that these notepads are distributed to lots of people. Each time you or your friend enter a new transaction, it gets added to all the notebooks simultaneously. Now everyone in the group can view the information and agree that all the notepads match. This makes it very difficult for anyone to cheat or alter any of the notepads without being noticed. To add a false entry or edit existing entries would mean someone would have to change all the copies of the notepads at once.

This is similar to how a blockchain works. Each block of transactions is added to a public ledger that is distributed across a network of computers. The ledger is transparent, meaning anyone can see the transactions, and any attempts to tamper the ledger, meaning it's difficult to alter the records once they've been added to the blockchain. This is almost impossible to tamper with and why the blockchain is considered a secure method for keeping data.

Adoption

Cryptocurrency is a rapidly changing technology and is altering the way we think about money. According to recent studies, the number of people using cryptocurrencies has increased dramatically since 2018, reaching over 100 million users worldwide and continuing to grow in popularity every day. Additionally, there is an increase in businesses accepting cryptocurrencies as a form of payment. Well-known names such as PayPal, Visa, and Tesla now accept crypto with industry interest growing almost daily.

Countries are also becoming more friendly towards cryptocurrencies. Last year (2022), El Salvador became the first country to adopt Bitcoin as legal tender, with other countries like Ukraine, Colombia, and Brazil moving towards the adoption and use of cryptocurrencies.

Challenges exist in relation to widespread adoption though with concerns around security and the volatile nature of the value of cryptocurrencies. However, the increase in adoption of cryptocurrencies by the general public and business, means improvements and advances in security and regulation are likely to occur very soon.

Probably one of the most well-known cryptocurrencies is 'Bitcoin'. Created in 2008 by Satoshi Nakamoto, Bitcoin allows people to exchange digital currency via their computers and phones without any central party (such as a bank or government).

Today people can use Bitcoin and other cryptos to purchase a wide variety of things in the same way they would with regular money. From coffee to property, crypto is rapidly becoming a valid form for trading, saving, and earning.

How to get involved

To use cryptocurrency, you need a digital wallet. Think of this as a bank account that you control in the form of a digital wallet. Most wallets can be installed and used on your mobile phone. With the wallet can send and receive cryptocurrency to friends and family or anyone else, all the transactions are recorded on the blockchain for everyone to see but your wallet details are private and available to you only.

Three of the most popular wallets worth considering are:

• Uphold inc  -  A super simple, easy-to-use wallet. Covers a wide variety of popular cryptos such as Bitcoin, XRP, XLM, XDC, VET, DOT, ADA, and more

. . . . .

• Coinbase Wallet  -  Probably one of the most well-known crypto wallets available from Coinbase. Simple and easy to use. Supports hundreds of thousands of coins and a whole world of decentralized apps. 

. . . . .

• Trust Wallet   - Well-established and trusted crypto wallet with a great selection of supported currencies

. . . . .

Popular Crypto Currencies

If you are looking to dive a little deeper and buy some crypto then here are a few worth investigating.

PLEASE NOTE: Do your own research before investing in any crypto

•    XRP
•  XLM
•   XDC
•   BITCOIN
•    VET
•    SOLANA
•    POLYGON
•    ETHEREUM

. . . . 

Please note: it is advised to seek professional financial advice before investing in any venture. This article is in no way an endorsement to invest in any of the companies or organisations included in this article

The information is based on the author's own research and opinions. The information is not guaranteed to be accurate or up-to-date. The author is not a financial advisor and is not qualified to give financial advice.

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