ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Cryptocurrency- The Power of Stateless Money!

Updated on July 20, 2018
Sreekant Unnithan profile image

Digital Marketing Expert at Prulancer. I swim, ride, play football and chess. I love to read and explore road less travelled.

Cryptocurrency has been a buzz for some time now.

“Never before have young people been able to change Economic Classes so quickly” – Erik Finman (Bitcoin Millionaire)

Totally agreed with Erik. Investing in Cryptocurrency is one of the fastest means of attaining wealth. But a lot of us are still hesitant of buying or investing in Cryptocurrency. And the major reason is, they still have no idea what cryptocurrency is and how it works.

The main intention of this article is to educate layman - what Cryptocurrency is, so sit back and relax get a cup of coffee and read through. By the end of the article, I am sure you will be clear what Cryptocurrency is and how it works.

Back in early 90’s, people used to ask, “What exactly the Internet is?” After 28 short years later (today), it is a question that no more exists. Internet has become an integral part of our day to day life today. Isn’t it?

And I am sure after a few years from now, there won’t be a need to ask, “What is cryptocurrency?” Just like the Internet, it will be a part of our everyday activities and lives.

Starting with the definition.

Cryptocurrency is a digital currency that uses cryptography for securing transactions and for verifying the transfer of assets. Both public and private keys are used to make the transaction between individuals.

Some terms associated with cryptocurrency:

Digital: Yes, it is a digital currency. That means it only exists in the computer systems, not in your pocket. It doesn’t have a coin with a picture or a paper with a note ‘In God We Trust’ written over it.

Global: There is no separate cryptocurrency for the US or Spain. It is same in every country. One can use it freely across any part of the world.

Decentralized: There is no physical bank exists where one can deposit his/her cryptocurrency. Everyone is the in charge of their money. It is not managed by any centralized server.

Peer to peer: As I said there is no bank where one can deposit his money. All the transactions are carried out online from person to person.

How cryptocurrency works differently from normal money (Fiat money)?

Let’s understand with an example: Adam is a hardware engineer and he is very hungry at the moment. And Eve is a content writer who wants her computer to be repaired. Eve goes to her bank and withdraws $10. Here, the bank acts as a trusted third-party system. Then she paid Adam $10, as he repaired her computer system.

Adam trusted the money (because it was issued by the Government) he got from Eve and knows he can buy a Burger for $5 from it. And put the remaining $5 in a bank for future.

This is how a normal or Fiat money rotates. Here Adam and Eve both have a trust on a third-party mediator (the bank) for transactions.

Now, let’s see how cryptocurrency works differently:-

Unlike fiat money, cryptocurrency doesn’t need any bank or government body. Users (Adam and Eve in case of example) can send money to each other without trusting each other.

I know you are wondering how? How is it possible to make transactions without building trust?

Cryptocurrency record each and every transaction (like the one between Adam and Eve) on a common shared platform called Blockchain. It is shared with thousands of computer systems called nodes.

The node is responsible for verifying each and every transaction under a process called mining. Mining makes sure that all the transactions which are verified are correct and then added them to the blockchain. Once the information is added to the blockchain, it cannot be deleted or changed.

In this whole transaction, you don’t have to provide your name, address, or any other kind of personal information. You have your own public and private key. It is just like your email account. The public key is like your username and private key acts as the password.

The name and location of users are hidden from the public but all the transactions are public. Anyone can see the transactions that happen on the blockchain. But it is not possible to find the users behind it.

So, if someone asks you, what is a cryptocurrency? Tell him, it is a form of virtual money that you can send to anyone who lives on this planet (without the need of a bank).

Both developed and developing nations of the world are trying to legalize and regulate the use of cryptocurrency in some way or another. Even the countries like China and Russia with strict regulations and political restrictions are trying to make it available so that people can make Global transactions more freely.

We are standing at the start of a new era which is really exciting. And I am sure, cryptocurrency will help in attaining financial freedom. Using cryptocurrency will make you a member of the global family who is free to trade across borders. The concept behind cryptocurrency is very fascinating, interesting and exciting enough to make people know more about it every day.

Okay! I have to go for now but soon come back with my next topic “How and where to buy cryptocurrency? “

Would like to hear what is Cryptocurrency for you? Let me know in the comment section and don’t forget to share this post. TIA 

© 2018 Sreekant Unnithan

Comments

    0 of 8192 characters used
    Post Comment

    • champat profile image

      Champat Sahai 

      3 weeks ago from New Delhi

      Quiet helpful information

    • Sreekant Unnithan profile imageAUTHOR

      Sreekant Unnithan 

      4 weeks ago from Jaipur

      Thank you Shaloo. I am working on it. Will publish it soon :)

    • swalia profile image

      Shaloo Walia 

      4 weeks ago from India

      Informative... looking forward to next in the series!!

    • profile image

      Priya Singh 

      4 weeks ago

      Quiet Insight full ...a great article for people who want to understand Cryptocurrency!

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)