Cryptocurrency: A guide for beginners

If you haven't been living under a rock then I'm sure you've heard of this Cryptocurrency. All the financial jargon out there can make this topic a big confusing so let's break it down in this blog post!

Cryptocurrency is all over the internet and news at the moment and you may even feel pressure to buy some without actually knowing or understanding what is is... which you should never do! You may be thinking that Cryptocurrency is brand new and I mean it is in terms of it being a new currency but it wasn't founded last week and in fact the first real cc which was believed to be Bitcoin was founded in 2009. However, there were ones before that they just were not really considered.

So what does this word 'Cryptocurrency' actually mean?

Well 'Crypto-' means hidden or secret and '-currency' means a medium to exchange goods or services. You may be wondering why it's called secret currency, I think it's because of how encrypted the systems and networks are.

Normal currency is physical in that you can hold money and feel it exchanging between hands or you can hold your credit card. Crypto (short for cryptocurrency is different). It is not physical and does not actually physically exist and instead you can view it like this digital or virtual currency. So although it can be used to exchange goods online you cannot (at the moment) walk into your local supermarket and pay for your groceries using crypto... at least not yet here in the UK. Having said this a lot of large international companies are now allowing crypto as a method of payment.

Crypto is not physical and is instead 'decentralised' meaning it can be exchanged online directly between people without the need for a middle man like banks or financial institutions. This also means that they happen outside of the control of authorities.

What's the point?

So you may be wondering what the point is in having digital currency. The main point in them and the reason they were created in the first place is to offer an alternative to traditional currency and offer a way of taking the power away from banks and government and authorities and instead giving the power to the person owning the crypto. No one owns nor regulates it.. I guess this could be an advantage or disadvantage.

Cryptos get a lot of attention because they offer the transfer of funds between two parties directly without a regulated trusted middle man like a bank or debit card company. People also like them because they often use this so called blockchain technology which is very secure and difficult to hack. I was wondering how to explain blockchain technology but read something that explains it way better than I could which was that blockchain technology is like a google doc. When we create a document and share it with a group of people, the document is distributed instead of copied or transferred. This creates a decentralized distribution chain that gives everyone access to the document at the same time. No one is locked out awaiting changes from another party, while all modifications to the doc are being recorded in real-time, making changes completely transparent. Of course, blockchain is more complicated than a Google Doc, but it makes the point that crypto is transparent, reduces fraud and is relatively secure and difficult to hack. To hack a blockchain you'd ideally need to own over half of it as you'd need to be able to control the majority of the network given that no one owns it and its a decentralised system as I mentioned earlier. This means it would be very difficult to hack, require lots of time and money and so would be a bit pointless.

Quick Q&A:

1. How Do You Get Cryptocurrency?

Any investor can purchase cryptocurrency through crypto exchanges like Coinbase, Binance app, and more.

2. How Does Cryptocurrency Make Money?

Money can be made by buying some cryptos, holding them until prices are high and then selling it at a profit.

It's quite a volitale risky investment, for example right now I have investments in bitcoin, Ethereum and a tiny bit of money in Cardano and Dogecoin and so far I have only lost money however over time I hope to make money as I'm prepared to hold it to it for the long term until prices are right.

3.What Are the Most Popular Cryptocurrencies?

Bitcoin is by far the most popular cryptocurrency, followed by other cryptocurrencies such as Ethereum, Litecoin, and Cardano.

I hope this post gave anyone reading some basic knowledge!

Thank you for reading!