The use of the word "cryptocurrency" has grown significantly over the past 10 years. People from all over the world are interested in learning what cryptocurrency is and how it works. Let's figure this out together.
The history of cryptocurrency
Such a phenomenon as Bitcoin was a sensation back in 2009. Let's look at the path that cryptocurrency "took" before its official release.
- 1983 – American crypto entrepreneurs David Chaum and Stefan Brands began working on the concept of "electronic" money and introduced the idea of electronic cash.
- 1991 – Stuart Haber and W. Scott Stornetta developed a secure and secure digital ledger system, the blockchain. This laid the foundation for the further development of cryptocurrencies.
- 1997 – Adam Beck proposed the concept of "HashCash" - a “proof-of-work” system used to limit e-mail spam and denial-of-service attacks. This concept later became a key component of Bitcoin's blockchain technology.
- 2002 – Wei Dai created "b-money" - a system of anonymous electronic cash, which was one of the early concepts of cryptocurrency.
- late 2008 – early 2009 – an anonymous person or group of people using the pseudonym Satoshi Nakamoto introduced the first digital currency, Bitcoin.
The process of digital currency development was difficult and quite long, but it was the early concepts of HashCash and b-money that paved the way for Bitcoin and other cryptocurrencies. Without them, it is quite possible that cryptocurrency might not be popular or would not exist at all.
What is cryptocurrency and how does it work?
A cryptocurrency is a type of digital currency that operates independently of a central bank or government. It uses cryptographic techniques to secure and verify transactions and control the creation of new coins.
The most famous cryptocurrency is Bitcoin (BTC), but thousands of other cryptocurrencies (Ethereum, Litecoin, TRON, USDT, etc.) are currently in circulation. If you compare digital currencies with fiat currencies, cryptocurrencies are not subject to inflation, government regulations or any restrictions.
In everyday life, digital currencies are used to pay for services / goods on the Internet. Many online stores (e.g. Etsy, Microsoft, Shopify) accept cryptocurrency as a form of payment. This makes it easier to buy from anywhere in the world, because there is no need to worry about exchange rates or commissions.
Investing is also a common way of using cryptocurrency. A good example of successful investing is Eric Fineman. At the age of 12, the boy invested $1,000 in Bitcoin, which his grandmother gave him, and at the age of 18, his investment exceeded $1 million, making him a millionaire.
Pros and cons of cryptocurrency
Pros:
+ Not controlled by any central authority, but certain processes are currently underway to achieve control over the regulation and circulation of cryptocurrencies at the governmental level (SEC in the USA);
+ Uses cryptography to secure transactions;
+ Cryptocurrency can be used by anyone;
+ Transactions can be completed in seconds or minutes.
Cons:
- The value of cryptocurrency can fluctuate quickly and unpredictably;
- Not regulated by any state institution, so there is no protection for users in case of fraud or theft / scam;
- It is not a commonly accepted form of payment;
- Transactions cannot be reversed once confirmed on the blockchain.
The most popular cryptocurrencies
Bitcoin (BTC)
Bitcoin is the first and most famous cryptocurrency that allows secure and anonymous transactions without any central authority. Follow the link to read more.
Ethereum (ETH)
Ethereum is known for its smart contract capabilities, which allow other developers to use Ethereum to create their own cryptocurrencies and web3 applications. Follow the link to read more.
Litecoin (LTC)
Litecoin is often seen as a lightweight version of Bitcoin with faster transactions and lower fees. Follow the link to read more.
TRON (TRX)
TRON is a platform with its own cryptocurrency (TRX) that focuses on creating a decentralized entertainment ecosystem. Follow the link to read more.
Tether (USDT)
Tether is a stablecoin that is pegged 1:1 to the US dollar. Its value remains relatively stable, unlike other cryptocurrencies, which can experience significant price fluctuations. Follow the link to read more.
Each of these cryptocurrencies has its own unique features and benefits. This is what makes them popular among both investors and users.
Cryptocurrencies VS fiat currencies
Security
Cryptocurrencies: cryptography is used to secure transactions.
Fiat currencies: protected by government and banking systems.
Volatility
Cryptocurrencies: high volatility.
Fiat currencies: low volatility.
Acceptance
Cryptocurrencies: it is not a commonly accepted form of payment.
Fiat currencies: widely accepted as a form of payment.
Both cryptocurrencies (BTC, ETH, LTC, TRX, USDT) and fiat currencies have their unique advantages and disadvantages. Cryptocurrencies offer a higher level of security and anonymity, fiat currencies are more stable and widely accepted, but subject to government regulations and banking systems.
How to buy / sell / store cryptocurrency?
In order to manage the cryptocurrency, a digital wallet is required. There are custodial and non-custodial cryptowallets. Non-custodial wallets give users full control over their private keys, while custodial wallets store private keys on behalf of the user.
Examples of non-custodial wallets:
- Trust Wallet;
- Coinbase Wallet;
- Exodus;
- Any.Cash.
Examples of custodial wallets:
- BitMex;
- Kraken;
- Binance.
We recommend the Any.Cash multi-currency crypto wallet in Telegram. Its user-friendly interface guarantees ease of use, and modern encryption methods ensure safety and reliability.
How to buy / sell cryptocurrency in Any.Cash?
In Any.Cash you can exchange:
- one cryptocurrency for another;
- cryptocurrency for fiat currency.
Detailed instructions for each method can be found via the link.
How to store cryptocurrency in Any.Cash?
In order to store cryptocurrency in Any.Cash, you can:
- make a deposit to the balance of the desired cryptocurrency and store funds on the balance (via a crypto transfer from another wallet or via a crypto transfer from the balance of another Any.Cash user);
- exchange fiat / other cryptocurrency for the desired cryptocurrency and also store it on the balance.
Funds will be securely stored until you want to withdraw them or exchange them for another currency.
Conclusions
Cryptocurrency is a relatively new technology, yet it has already had a significant impact on the world of finance. There is no denying the fact that cryptocurrency offers us an alternative to traditional currencies and, in addition to this, provides more privacy, security and accessibility of transactions. Since cryptocurrency carries a certain set of advantages and disadvantages, then you should carefully study them and decide for yourself whether it is worth getting started with the cryptocurrency world.
