What Is Cryptocurrency
And Why You Should Learn How To Use It Now?
Cryptocurrency is a type of digital currency that allows users to make transfers in the digital space.
The term is formed by merging the words cryptography (data encryption) and currency. Cryptography plays an important role in the cryptocurrency space, as it provides reliable data encryption and protects transactions from interference from third parties.
Why cryptocurrency transfers are different from online banking and e-wallets
Why do we need cryptocurrency and blockchain if technology already allows us to transfer any amount in any currency anywhere in the world — for example, using banking apps, PayPal or e-wallets?
All these services allow you to transfer money to relatives and friends quickly and easily, to buy goods in online stores, to pay for services of freelancers. But this is only an external similarity. In fact, these are two completely different technologies.
What is the difference between fiat money and cryptocurrency?
Ordinary currencies of different states, also called fiat, are issued and regulated by governments. This is true for rubles, dollars, euros, yen, yuan, won and any other currencies.
In contrast, cryptocurrency is decentralized, that is, no government or other centralized body controls it, does not issue it and therefore, can’t influence what is happening within the network. The existence of the cryptocurrency is ensured by a network of participants (nodes), which run certain programs on their hardware and exchange information, constantly updating information about the state of the network.
The register of transaction information is called a blockchain.
The rules of cryptocurrency operation can’t be changed by any participant in the network, even those who own huge sums of money in this cryptocurrency, unless they have the full support of all participants in the network.
So, the money we are used to is a centralized system. For mutual settlements we need an intermediary — usually a bank.
In the case of cryptocurrency, we don't need an intermediary — you can make payments directly (Peer-to-peer, P2P).
What is the benefit of this?
Decentralized cryptocurrency networks are resistant to any attempts of interference or shutdown by the authorities or other intruders. At the same time, a traditional financial system is not so difficult to shut down — it is enough to cut off the main server.
Imagine that you send $1000 to your grandma as a birthday present. Only you and the bank through which you made the transfer have information about that transaction. Other clients of the same bank can’t see this transaction and therefore can’t confirm that you actually sent the money.
An unforeseen event occurred when the transfer was being sent. Let's say a meteorite hit the bank's server, or a high-ranking employee decided to press the "red button" and erase all the transaction data for the last 15 minutes.
The money was debited from your account, but didn't make it to your grandmother, and the confirmation of the transaction was lost. You would not be able to prove the fact of the transfer, or get the money back, and nobody would be able to confirm that you actually transferred the money, since only you and the intermediary bank knew about it.
Of course, such situations seem far-fetched and unlikely.
But today we periodically observe the depreciation of national currencies, some slowly year after year, others are instantaneous in the face of shocks or economic crises
Deposits that used to be able to live for years turn into nothing overnight.
Where once there was enough money in the deposit to buy a car, now there is barely enough for one trip to the grocery store.
The estimated loss was around $460 billion — just think about it! Centralization made this possible — one person or group of those in power made the decision and pressed that very «red button».
So, the centralized financial system is unstable and vulnerable to all kinds of threats, and the number of these threats is only increasing over time.
Why cryptocurrencies are safe and hack-proof
The cryptocurrency network works differently. As soon as you make a transaction, information about it is broadcasted to all the computers on the network, and there are millions of them. All members of the network simultaneously become aware that at some point in time you sent a certain amount to a certain network member.
The transaction is signed with your unique digital signature, which confirms that both the cryptocurrency wallet and the money in it belong to you.
Even if one of the network's computers fails, it will not affect the performance of the entire network or the integrity of transaction data in the blockchain. Let's imagine a more formidable scenario: an entire country suddenly decided to shut down the Internet in its territory, and the cryptocurrency network has lost all participants from India, China, the US or another country.
Once again, the blockchain will survive, as the remaining devices will have a full record of all transactions.
Why Cryptocurrency is the Money of the Future
— Total independence — no government, public organization or global business corporation can shut down the blockchain or ban cryptocurrency.
— Guaranteed execution of the transaction — your transfer can’t get lost, no one can erase it from the blockchain since millions of computers will record it in a distributed ledger the moment it is executed.
— Complete anonymity — network participants see only the digital signature, but don’t know your name, nationality, or country where you made the transfer. The same goes for the recipient of the transaction.
— Accessibility for everyone regardless of citizenship, social status, country of residence, availability of documents. No passport or phone number is needed to create a crypto wallet. All you need is a device with Internet access.
Change or go away
► If you want your money to be stored securely, then it is time to create a cryptocurrency wallet.
► If you want to transfer and receive money anonymously anywhere in the world without having to be accountable to anyone, then it's time to give cryptocurrency transfers a try.
► If you want to be financially independent from any cataclysms, political decisions, the decisions of those in power, then start to master the world of cryptocurrency.
The future comes without asking if we are ready. It has already come, and we can either accept it, or deny it and pretend that we are living well in the past. The choice is yours, and so is the responsibility!
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