What Is Cryptocurrency?

"What Is Cryptocurrency?"

This is not a dumb question.

First things first: the image above is deceiving. When you buy cryptocurrency, you will not receive an actual coin as shown above.

According to a recent report from Gemini (that is a cryptocurrency exchange) 26% of current crypto holders in the United States are women.

By educating ourselves about cryptocurrency, women can have the confidence to penetrate this industry and get more involved in the crypto world.

So, in Plain English, What Actually Is Cryptocurrency?

Cryptocurrency is a digital or virtual currency that uses cryptography to secure its transactions and to control the creation of new units.

Well, What is Cryptography?

Cryptography is the practice and study of techniques for secure communication along the blockchain network using blockchain technology.

So, you won't be getting a physical coin when you purchase digital assets. If someone is trying to sell you an actual physical coin and calling it cryptocurrency, it is likely a scam.

How Does Cryptocurrency Work?

Cryptocurrencies use a blockchain ledger to keep track of transactions.

This blockchain network is not operated by a bank or government.

It is maintained by a network of computers.

You can think of cryptocurrency like using your Venmo account. You may never actually see the U.S. dollar amount in paper money taken out of your bank account.

You trust the U.S. dollar amount shown in a transaction to your bank account or from a friend or associate's account is what it says on the screen because the numbers match what you believe the amount should be.

So is the case with blockchain technology, but the ledger is public and the amounts are in digital currencies, not the U.S. dollar.

The blockchain ledger is a series, or chain, of blocks, on which transaction details are recorded after suitable authentication and verification by the designated network participants.

It is a transparent ledger that shows all cryptocurrency transactions.

Cryptocurrency is a type of alternative currency and has been around since the early days of the internet.
Bitcoin, which was created in 2009, was the first cryptocurrency ever created.

What's the Big Deal About an Alternate Currency?

Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.

Bitcoin, for example, is managed by a decentralized network of computers around the world that track all bitcoin transactions.

Many people are attracted to the anonymous and deregulated nature of digital assets.

There is no central authority hovering over your digital assets.

Digital currency is kept track of on a blockchain address.

How Does Cryptocurrency Work if It is Decentralized?

Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.

Bitcoin, for example, is managed by a decentralized network of computers around the world that track all bitcoin transactions.

How Can I Buy, Sell, and Use Cryptocurrencies?

Cryptocurrency is often bought and sold on cryptocurrency exchanges. Bitcoin, the most well-known cryptocurrency, can be bought and sold on exchanges like Coinbase and Binance.

Cryptocurrency is an exciting new technology with the potential to revolutionize how we buy and sell things.

However, it's important to remember that cryptocurrency is still a new and volatile market. Investing in cryptocurrency is risky, and you should never invest more than you can afford to lose.

You may feel hesitant because when you buy cryptocurrencies, because you aren't actually holding physical crypto assets in your hand.

The truth is, you are probably doing similar transactions already.

When you send cash by Venmo, Cash App, or trade securities like stocks, you are most likely not getting anything physical either.

If you make an investment in a security like a stock or bond, do you get a trade confirmation and sleep soundly?

What is DeFi?

DeFi is short for decentralized finance. DeFi is a cryptocurrency movement that is built on the Ethereum blockchain.

DeFi projects are designed to offer financial services that are typically provided by banks or other centralized institutions. These services include lending, borrowing, and trading.

Because DeFi projects are built on the Ethereum blockchain, they are open and accessible to anyone with an Ethereum wallet.

This makes DeFi projects ideal for people who don't have access to traditional financial services.

So far, the most popular DeFi project is MakerDAO.

MakerDAO is a decentralized lending platform that allows users to borrow Dai, a stablecoin that is pegged to the US dollar.

Other popular DeFi projects include Kyber Network, a decentralized cryptocurrency exchange, and Augur, a decentralized predictions market.

What is Bitcoin?

Bitcoin is a cryptocurrency and a payment system. It was created by Satoshi Nakamoto in 2009. Bitcoin is the first and most well-known cryptocurrency.

Bitcoins are stored in a digital wallet and can be used to purchase goods and services. Transactions are verified by a network of computers.

Bitcoin has several advantages over traditional payment systems. It is fast, cheap to use, and secure.
However, it is also volatile and not backed by any government or financial institution.

What is Ethereum?

Ethereum is a cryptocurrency and a blockchain platform for smart contracts.

What Are Smart Contracts?

Smart contracts are applications that run exactly as programmed without any possibility of fraud or third party interference.

Ethereum is used to build a decentralized internet and is powered by Ether, a cryptocurrency.

Ethereum was created in 2015 by Vitalik Buterin.

How Many Cryptocurrencies Are There?

There are thousands of different cryptocurrencies. We are not going to get into every type of digital currency in this article.

Once you are comfortable and feel you have basic crypto knowledge, there are many cryptocurrency areas to further explore.

There is also a world of other areas of digital assets to learn about in regards to NFTs, Web3, and the Metaverse.

We are just addressing the basics of what a digital asset is, the use of virtual currencies, cryptocurrencies like Bitcoin and Ethereum, and crypto exchanges.

​Is Cryptocurrency an Investment Vehicle, a Method of Payment, or Both?

You may have heard about Bitcoin Millionaires or people who seemed to have virtually made money overnight by getting into cryptocurrencies.

Cryptocurrency can be used as both an investment vehicle and a method of payment. When cryptocurrency is used as an investment vehicle, investors can buy cryptocurrency in hopes of it appreciating in value.

For example, if you bought Bitcoin when it was first created in 2009, you would have seen your investment increase significantly in value over the years.

Cryptocurrency can also be used as a method of payment. For example, you can use Bitcoin to purchase goods and services online. You can also use cryptocurrency to send money to friends and family around the world.

The advantages of using cryptocurrency as an investment vehicle or a method of payment include its speed, security, and anonymity.

However, cryptocurrency is also part of a volatile market with no guarantee of appreciation.

Should I Invest in Cryptocurrency?

Investors should only invest what they can afford to lose in cryptocurrency. You should also be aware of the risks involved before investing any money.

Cryptocurrency is an exciting new technology with the potential to revolutionize how we buy and sell things.
However, it's important to remember that cryptocurrency is still a new and volatile market. Investing in cryptocurrency is risky, and you should never invest more than you can afford to lose.

What Are the Pros and Cons of Using Cryptocurrency as a Payment Method?

The advantages of using cryptocurrency as a payment method include its speed, security, and anonymity. However, the disadvantage of using cryptocurrency as a payment method is that it is a new and volatile market.

Before you decide to use cryptocurrency as a payment method, you should weigh the pros and cons carefully.

What Are the Risks of Investing in Cryptocurrency?

Investing in cryptocurrency is risky. The cryptocurrency market is new and volatile, and prices can go up or down quickly. You should never invest more than you can afford to lose.

In addition, there is always the risk of fraud and theft when investing in cryptocurrency. You should only invest in cryptocurrency with money that you are willing to lose.

What is DAO?

A DAO is a decentralized autonomous organization. A DAO is an organization that is run by code, not by people.

DAOs are organizations that exist on the Ethereum blockchain. They are created by developers who write code that governs how the DAO operates.

The most well-known DAO is TheDAO, which was created in 2016. TheDAO raised over $150 million from investors and then failed spectacularly after a hacker stole millions of dollars worth of Ether from the organization.
​
Despite this setback, DAOs continue to be popular among cryptocurrency enthusiasts. Some popular DAOs include MakerDAO, Kyber Network, and Augur.

What Now?

So you have dipped your toe in the cryptocurrency world and maybe you want to get started buying Bitcoin, Ethereum, or other cryptocurrencies.

Do your research. Speak to experts. Take courses and study the value of cryptocurrencies. Look at popular cryptocurrencies and others that may be under the radar.

Do vendors you use accept Bitcoin?

Do you want to use crypto as a payment method for your business?

Read as much as you can about cryptocurrencies and gain as much crypto knowledge as you can.
​
Do your research and ultimately, armed with facts, trust your instinct and decide whether crypto is for you.