What is Cryptocurrency?

by | Sep 3, 2020 | Industry | 0 comments

A cryptocurrency is a digital or virtual currency designed to function as a medium of exchange. Examples of common cryptocurrencies include Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). They utilize cryptography techniques to secure and verify transactions and to control the creation of new units.

Cryptocurrencies use decentralized control as opposed to fiat money and central banking systems. The decentralized control of every cryptocurrency runs in blockchain technology.

The birth of Bitcoin (BTC), the first cryptocurrency

31 October 2008

A pseudonymous developer, alias Satoshi Nakamoto, published a white paper called Bitcoin: A Peer-to-Peer Electronic Cash System, describing the functionality of the blockchain network. This day in Bitcoin history has shaped the events that followed.

3 January 2009

Satoshi Nakamoto mined the first block of the Bitcoin network (the Genesis Block), effectively piloting the blockchain technology.

2 May 2010

The first recorded purchase of goods was made using Bitcoin when Laszlo Hanyecz bought two pizza for 10,000 BTC. The crypto community celebrates this day as the Bitcoin Pizza Day.

The beginning of a cryptocurrency market

March 2010

The first crypto exchange, bitcoinmarket.com (now defunct), was launched. Two months later, Mt.Gox was launched as well.

2011–2013

Bitcoin managed to attain the value of the USD. During this period, alternative coins (AltCoins) were issued. By May 2013, the crypto market comprised of 10 cryptocurrencies, including Litecoin (LTC).

Ethereum and the introduction of the ERC-20 tokens

30 July 2015

The Ethereum blockchain, currently the second crypto-asset regarding market capitalization, was launched. It unveiled smart contracts to the crypto world.

2015 to present

More and more ERC-20 tokens have been issued. There are currently more than 200,000 ERC-20 tokens in the market.

What you can do with cryptocurrencies?

Buy goods

Numerous merchants accept cryptocurrencies as forms of payment. They range from giant online retailers like Overstock and Newegg to SMEs, local shops, bars, and restaurants.

Invest

Many people hold that cryptocurrencies are the hottest investment opportunities currently available because of their volatile nature. Indeed, there are real stories of people becoming millionaires via crypto investments.

However, it is worth noting that digital currencies are high-risk investments! Before investing any money in cryptocurrencies, learn the ins and outs of crypto.

Mine

Miners are the single most essential group of any cryptocurrency network, and just like trading, mining is an investment too. Miners offer bookkeeping services for their respective networks by contributing their computing power to solve complex cryptographic puzzles.

Monetary Properties of Cryptocurrencies

Controlled Supply

Most digital currency networks cap the supply of their coins. For instance, in Bitcoin, the supply reduces with time and will hit its maximum supply sometime in 2140. Cryptocurrencies regulate the supply of the token by a schedule labeled in the code.

This implies that the monetary supply of a cryptocurrency in every given moment in the future can roughly be estimated today.

No debt but bearer

The fiat money you have deposited on your bank account is created by debt, and the numbers you see on your ledger symbolize nothing but debts. It is a system of IOU. On the other hand, cryptocurrencies do not represent debts; they represent themselves.

To appreciate the revolutionary impact of digital currencies, you should consider both parties. Cryptocurrency, as a permissionless, irreversible, and pseudonymous payment method, is a threat to the control of central banks and governments over the monetary transactions of their citizens. You cannot bar someone from using Bitcoin, you cannot stop someone from accepting a crypto payment, and you cannot undo a crypto transaction.

As money with capped, regulated supply that is not changeable by a government, a financial institution, or any other third party, cryptocurrencies threaten the existence of the monetary policy.

Although it is still new and unstable compared to the gold standard, cryptocurrency is undeniably gaining traction and will most likely have more normalized applications soon. The primary thing is making it easy for large-scale adoption (concerning anything involving digital currencies), including building safeguards and protections for investors. This is precisely what Tokenizer is doing!

How to buy crypto

There are plentiful options where you can buy cryptocurrencies — for instance, crypto exchanges, Peer-to-Peer networks, and BTC ATMs. To purchase cryptocurrencies, you need a “wallet,” an online app where you can store your digital assets. Basically, you create an account on an exchange like Tokenizer, and then you can use fiat money to buy the digital currency you want.

Tokenizer is a popular crypto trading exchange where you can create both a wallet and buy and sell different types of cryptocurrencies like Bitcoin. Sign up today and experience professional, secure, and transparent crypto trading services.

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