Cryptocurrency: A Guide For Dummies

Jump to page contents

Cryptocurrency: A Guide For Dummies

Cryptocurrency is unlike any other kind of money the world has known. It doesn’t exist in physical form, you cannot carry it in your purse or your physical wallet, and it is a truly democratic form of currency because it’s far removed from any government interference. Here’s a brief look at what is cryptocurrency, if you are new to it.

The term of the currency tells us a lot – CRYPTO because the currency is created using cryptography protocols. Sounds nerdy? It is. Basically, it’s complex codes which make use of complex algorithms to protect and create 100% unique and unhackable data. This makes the currency virtually impenetrable and impossible to replicate. Additionally, cryptocurrency then makes use of blockchain technology for transaction purposes, that is, to be able to send and receive it.

The first cryptocurrency ever created was Bitcoin. It is by far the most popular one on the market, despite other players being in the field. Ever since its inception more than a decade ago, this cryptocurrency has seen a phenomenal growth. It was established to act as an electronic cash system in the US financial crash of 2008 between two users without interference from anyone else.

If you follow Bitcoin News, you know that it has succeeded in gaining traction. A user can send and receive funds only if the transaction is confirmed. Unconfirmed transactions remain pending and do not go through. When a cryptocurrency transaction is confirmed, it goes on record (with the use of blockchain), to make sure it cannot be forged or changed. This confirmed transaction also becomes part of the overall currency blockchain.

The confirmation clause also means that you cannot reverse the process. This means you need to be very careful. Ensure that you send the Bitcoin to the right person before hitting the ‘Send’ button. Security is provided by the blockchain itself. It’s worth mentioning that Security Tokens have nothing to do with how secure the token is.

Imagine a day at the bank or while you’re transacting online. Doesn’t every single monetary transaction require some sort of a record? A cheque, an entry or any document of some sort? But with cryptocurrency, all that is bypassed. This is done by making every single unit in the blockchain universe accountable for the transaction. If there’s even the smallest issue, everyone on the blockchain needs to work to find out where and what happened. This avoids the need for middlemen which tend to take a percentage fee for their service.

Another point to keep in mind is the secrecy and security this system offers. For starters, we’ve already seen that it has no controlling or governing body. This makes it a decentralised, meaning it is not owned by a single entity. Apart from this is the sheer anonymity of it all. When you get a Bitcoin address, you actually get 30 characters which are quite random. Who you are in real life is not relevant. Only the entity which gives you the cryptocurrency address knows who you really are.

Similar to bank transactions, cryptocurrency transaction is super-fast too. You can send and receive money anywhere in the world in a matter of minutes. You don’t need a bank account or any other institution to use bitcoin. You can get started and buy some Bitcoin with your credit card here.

Apart from Bitcoin, the other popular currencies are Ethereum, Monero and Ripple, among many others. Why does Bitcoin enjoy so much popularity? Perhaps one of the reasons is how high the price has risen in the past 2 years. No matter the market or how volatile it is, Bitcoin works in all scenarios.

More and more investors are looking at cryptocurrency to be a part of their trading portfolio. It gives them high returns, shows signs of growth, and does not come under the ambit of rigid controls.

Ready to join our tribe?

We respect your email privacy

Subscribe now to recieve exclusive updates and offers!

Recently Similar Guides

Latest Guides

Banking,Bitcoin,Cryptocurrency

How to Buy Bitcoin with Bank Account

The mainstream explosion of cryptocurrencies has led to an increase in the number of ways you can buy cryptos. It wasn’t long ago when Bitcoin was considered a risky fringe asset, with banks and most financial service providers refusing to handle any transactions related to Bitcoin. There are some countries where you cannot buy Bitcoin […]

10 April, 2021
Cryptocurrency,Exchange Platforms,Investment

Coinbase Vs Coinbase Pro: Which one to choose?

With cryptocurrencies making waves globally, many people now look for ways to convert their fiat currencies into popular cryptos like Bitcoin, XRP, Ethereum, etc., on different crypto exchanges. Today, more than 300 crypto exchanges are available, and it can be daunting to know which to choose. One of the most popular exchanges with over a […]

9 April, 2021
Bitcoin,Crypto Wallets,Deposit Bitcoin

How Can I Get A Bitcoin Address?

If you’re planning to buy Bitcoin or any other cryptocurrency you will need to have a wallet where to store your funds. Some exchanges offer a free, in-built wallet and deposit your cryptocurrencies directly there. Other platforms do not offer their own wallets and require you to know and provide your wallet address. In this […]

5 April, 2021
Trading

How to Trade on Binance? (A Comprehensive Guide)

In this guide, we go through how to trade on Binance – everything from adding funds to crypto trading strategies. Let’s dive in! What is Binance? Binance is a well-known cryptocurrency exchange in the crypto market. In 2017, Changpeng Zhao founded this exchange which turned out to be one of the largest crypto exchanges and […]

31 March, 2021
Crypto Wallets,Ledger,Security

Cold Wallet vs Hot Wallet: Which One Should You Choose?

Wallets are a vital part of cryptocurrencies since they provide a safe and functional way to store and transfer funds from one user to another. There are several different types of wallets and numerous solutions per type. The cold wallet vs hot wallet debate is almost as old as cryptocurrencies themselves, and as is often […]

31 March, 2021
Bitcoin,Blockchain,Crypto Mining

How To Mine Komodo in 2021 (Step-by-Step)

Komodo (KMD) is an upgraded version of, what are now, traditional cryptocurrencies. Developed by the SuperNET team and forked from ZCash, KMD sets a higher standard for security and smart chains. Surrounding Komodo is an ecosystem in development. Once finished, it will provide advanced tools, including decentralised trading. This cryptocurrency is growing in popularity for […]

27 March, 2021
Bitcoin,Crypto Mining,Mining

Tron Mining – Can Tron Be Mined In 2021?

2021 has been the year crypto investors and traders have been looking for over a decade. Bitcoin and many other Altcoins are having the bull run of their lifetime. The market capitalization of all the cryptos combined has crossed 1.7 trillion, with Bitcoin dominating the market with ~60% share. The mainstream adoption of cryptocurrencies by […]

26 March, 2021
Binance,Exchange Platforms,Kraken

Binance vs Kraken: Comparing Exchanges

There are several top-ranking cryptocurrency exchanges and in this guide, we will be presenting two of the biggest and oldest ones. In this Binance vs Kraken, you will learn the main features and drawbacks of both exchanges. This should help you understand which one is best suited for your needs.  At this point, it is […]

12 March, 2021