You’ve probably read about it in the business news, but what exactly is a cryptocurrency? Well, cryptocurrencies are units of digital information stored on a blockchain.
The blockchain is a ledger that keeps track of how many coins you (and everyone else) have. You can use these coins to pay for things, like Bitpay which lets you pay for stuff with Bitcoin right now. You can store your coins in a “digital wallet” and also “spend” them by transferring them to other people. Each cryptocurrency has it’s own blockchain and they are all kept up to date by computers called miners.
The words we use to describe different types of blockchain-based or digital currency are always evolving, and it is important to understand what these terms mean in order to understand their implications. By honing in on relevant terminology, we can ensure that our understanding stays current and accurate.
A reader of this article might ask: Is this issue of cryptocurrencies really so important that I should give a little of my precious time to check it out? The answer is: yes, it is. A person who knows nothing about cryptocurrencies might not fully understand why they are such a big deal. If you are still new to cryptocurrencies and you don’t know whether they are okay or not, read on.
WHY SHOULD YOU CARE
Bitcoin and Ether, the two cryptocurrencies that I’ll be talking about today, are the two most commonly cited and used. In 2008, Satoshi Nakamoto constructed the first blockchain – a financial blockchain.
Its value has skyrocketed to absurd levels: you may have seen articles like “If I had bought $100 of bitcoin in 2010, I’d now have almost $100 million” or “Bitcoin’s first billionaires.” Bitcoin is being accepted as a form of payment by an ever-increasing number of businesses and online merchants.