What is Cryptocurrency?

Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Some cryptocurrencies are assets, some are platforms and some are businesses.

Why are they valuable?

There will be only 21 million Bitcoins for a world of 7.5 Billion people. On average one person can only own a tiny fraction of Bitcoin = 0.003 Bitcoin/person in the world. So Bitcoin is in high demand. Bitcoin is thought of as “Digital Gold” by many people because it has many properties of gold such as limited supply and acts as a store of value. It has a limited supply of 21 million Bitcoins. It is a hard cap written in the Bitcoin code and no more Bitcoin can be created once it reaches 21 million. Limited supply and low inflation mean Bitcoin is in high demand.

Bitcoin’s Key Advantages

Bitcoin can be spent a lot more easily than gold, Bitcoin can be used to make purchases at tens of thousands of places around the world and everyday businesses around the world are opening up to the idea of accepting Bitcoin as a payment. Unlike gold, It is much easier to divide 1 Bitcoin down to 0.00000001 BTC or 1 satoshi and much easier to transport Bitcoin. Many cryptos try to differentiate themselves to address specific problems, they share a common set of characteristics: security, transparency, immutability, global accessibility, speed, and price.

• Security
  

  Bitcoin is secured by a network of computers around the world that are constantly confirming transactions on the Bitcoin blockchain. It is almost impossible to tamper with Bitcoin. Once a transaction is confirmed it stays on the Bitcoin blockchain forever unlike many traditional assets that can be tampered with. Cryptos are decentralised. Records don’t exist in one location but in hundreds or thousands of servers around the world. In the case of Bitcoin, the network can only be compromised if 51% of the computing power of the servers is directing a malicious coordinated attack. Which is almost impossible, unlike traditional digital records that are stored in one central location.

• Transparency
  

  Almost every cryptocurrency is open source, its source code is available for everyone to see. It is completely transparent. With the use of “explorers,” it is possible for anyone to see every transaction that has ever been executed since the crypto’s creation.

• Immutability
  

  It is immutable because no one can change the transaction history. These records can never be changed except when an ecosystem completely collapses.

• Global accessibility
  

  Anyone from anywhere can send and receive cryptos it is borderless. No sovereign government controls the cryptos.

• Speed
  

  Bank transfers typically take 3-5 business days and come with high fees with poor exchange rates between currencies. Cryptos solve this with transaction times ranging from a few seconds to 1 hour depending on the crypto being used.

• Price
  

  There is no exchange fee because it doesn’t need to be exchanged and it only comes with a transaction fee. Some transactions in cryptos are free such as on the EOS blockchain Real