Cryptocurrency is something that holds the opportunity to revolutionize the monetary systems we use. Bitcoin, the first successful form of cryptocurrency, is now worth more than 100 billion dollars.
But what is this stuff? Everyone raves about it if they know about it, but it seems like it’s a difficult thing to comprehend. Or, at least, it’s really hard to get started with it.
This isn’t necessarily true, though. There are a few terms that you need to internalize, but the language that’s used surrounding cryptocurrency is probably your only barrier to understanding it. It’s a system, and it sits somewhere outside of how we normally imagine the economy.
We’re here to explain that system to you, giving a brief intro to cryptocurrency.
A Beginner’s Intro to Cryptocurrency
The central idea behind cryptocurrency is the belief that money shouldn’t be regulated and centralized by governments. People imagine those who use cryptocurrency to be some kind of internet cowboys, riding away with the loot.
This just isn’t the case, there are a lot of normal ways that people use the currency. It is, however, largely anonymous, so people do use it to do bad things sometimes. The thing is, more people use real money to do bad things, so that argument should fly out the window.
The creators have the idea that governments and banks hold and regulate our money, therefore holding onto a piece of us. They also profit from us through interest, making billions of dollars while 90 percent of the U.S. population has less than 50 percent of the wealth.
The goal was to create a decentralized form of currency, and that’s what they did.
The Beginnings of Bitcoin
Bitcoin was the first cryptocurrency to really take hold. There were other attempts before Bitcoin, but most of them fell into obscurity. The original founder(s) of Bitcoin went by the name of Satoshi Nakamoto, who no one knows anything about.
They stayed anonymous for good reason, too, because the last thing that the government wants is a thorn in their economy’s foot. Bitcoin operates entirely online via a digital currency. There is no physical form of the currency, and there are no central figures of authority that control the system.
The only thing that exists explicitly is account numbers. Users don’t input their social security numbers, names, or any other personal information. But that begs the question, “how does it all work?”
Mining
Cryptocurrency is created with a cap. So, for example, Bitcoin was created with only 16 million Bitcoins. In other words, there is only so much gold to mine.
It’s not easy to get these units of currency, either. Individual miners have the job of digging up the Bitcoins through the process of solving extremely complex mathematical problems. These problems are solved by very powerful computers, and the user doesn’t necessarily have to do very much.
They just need to purchase and operate the equipment in order to let the computer do its job. When the computer solves one of the ever-challenging problems, a Bitcoin is added to the user’s account.
You Don’t Have to be a Miner to Get Bitcoin
You don’t need to invest in any high-tech computers or learn anything about the web to start using bitcoin. It has grown into a regulated system now, and it’s fairly simple to set up an account. It’s very similar to setting up a PayPal account nowadays, and the system is relatively intuitive.
There are places that you can exchange your normal currency for Bitcoins, called Bitcoin Exchanges. There are also a lot of ways that you can earn Bitcoins online. Some websites have you do certain tasks in order to earn the currency, but that might be for those who are bored and have a lot of extra time.
Another thing to note about Bitcoin is that its value has skyrocketed from its humble beginnings. The first ever purchase that was made through Bitcoin was for a pizza, and the customers paid 10,000 Bitcoins for it. Today, that value would be at around 100,000,000 dollars.
The value has kind of leveled out, though. The value is high, but it may not be jumping up at levels that it once was. Other forms of cryptocurrency, though, may have similar increases in value. That’s why you should look into the upcoming cryptocurrencies and invest in them because you might be able to make a lot of money on your investment.
You can read more if you’re looking to find currency and make an investment.
Yeah, But Can I Use It?
Using cryptocurrency is surprisingly easy. While you won’t find too many businesses that accept the use of it in person, there are over 100,000 vendors that accept the currency. Most of them are online.
There is no way to reverse or refund transactions, though. You and whoever you are exchanging goods and money with need to have an established amount of trust. That person could send your money back to you, but there’s little incentive to do that.
The other person is always anonymous, and there is no way to request a refund or complain about a dishonest person because there is no central piece of authority. This is the main downfall of cryptocurrency, but there are safeguards against this.
The most important thing that keeps people honest is the fact that if people started to disrespect the system and lie, steal, or cheat, the entire system would crumble. People aren’t going to invest their money in something that doesn’t work, so people strive to make it work.
There will always be outliers and people who steal, cheat, or act dishonestly, but the general foundation of Bitcoin has grown to such a large scale that the system is in motion, and the system relies heavily on the majority of people being honest. It works out that way, and it isn’t likely to change.
Take a Deeper Look
This intro to cryptocurrency is a brief introduction to the basic concepts told through the lens of Bitcoin. It’s only the beginning. It would be worth your time to develop a deeper understanding of the subject.
There are a lot of ways to make money online that you wouldn’t expect, and there’s no time like the present to gain an understanding of them!