What Are Cryptocurrencies, And How Do You Trade Them?
Posted on: 10 August 2018 by Ariyan Roy
Words like "cryptocurrency" and "bitcoin" have become increasingly more common the past few years, especially as access to them becomes less mysterious and laypeople are more comfortable with peer-to-peer technology. Yet, there is still a lot of misinformation regarding what they mean.
In this article, we will discuss exactly what cryptocurrency is, how to use it, and why it was created.
In its most basic terms, cryptocurrency is the act of exchanging data on a ledger that is decentralized. The user interprets and utilizes the exchanged data as financial. The concept is not all that different from your traditional checking account ledger, with the exception that it is centralized to the bank.
This means that the information on your ledger at your traditional account is confirmed and authorized only by the bank and its authorities. There is a finite value and inventory of "information" (cash) that can be confirmed and authorized for your account.
How Cryptocurrency is Different
In cryptocurrency, the centralized authority is replaced with third parties known as miners who confirm each transaction individually. They use a sophisticated system built on cryptography to confirm transactions and correctly enter information on the respective ledgers. Because cryptocurrency transactions are validated by math, which is objective, instead of subjective human intelligence, this makes them much more secure than the fallible banking system.
There are a number of benefits for those exchanging cryptocurrency. It is mostly anonymous and the transactions are not connected to real-world identities. Transactions are quite fast and can be confirmed anywhere around the globe in a matter of minutes. Most importantly, because of the use of miners and decentralization, there is no gatekeeping. Anyone who has access to exchange cryptocurrency can do it.
What Cryptocurrencies Aren't
Cryptocurrencies are not debts or IOUs, which is how banks operate. Think of them similar to a cash or debit card transaction: it is money the holder physically possesses in real time that no one else owns.
It is not traditional banking. While cryptocurrency was created by accident, it is a defiance against the traditional banking systems. Because cryptocurrency transactions are irreversible, there is no revenue service or bank authorities to undo the hard work of any transaction. This ensures that the transacted funds are free from politics and depreciation.
Who Created Cryptocurrency?
Satoshi Nakamoto is an anonymous identity or identities that first began coding what we now know as bitcoin in 2007. In October 2008, they released a paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System". Version 0.1 of bitcoin software was released in 2009 on Sourceforge.
As of 2010, Nakamoto is no longer part of the project. Source codes and the network alert key were handed off to a software developer named Gavin Andresen, and several other domains were dispersed among high-profile members of the bitcoin community.
How to Get Started
There are a number of brokers and professionals that are trained to assist buyers with their investments. InvestMIB and DeltaFxMarkets are noted brokers. InvestMIB offers a number of traditional and modern services, including VFC regulated trading on Bitcoin, Ethereum, Litecoin, and Tether. DeltaFxMarkets was developed by experienced traders with an innovative approach.
Because of the mathematics used in cryptocurrency, there is a finite number of bitcoins available to mine. While getting started in cryptocurrency does not specifically require a licensed trader, having a professional with experience is recommended. It is in their best interest to help you succeed.