What is cryptocurrency?
Cryptocurrency is the most recent and novel approach to spend, transfer and invest money online. Invented as a way to decentralise the online money exchanges, cryptocurrencies upset the global financial market by ‘cutting the middlemen’ out of the equation through a new technology called blockchain. This essentially means that money transfers can be done through peer-to-peer technology, bypassing institutions. It is decentralised, thus allowing people to swap money directly with no middle-man involved: banks, building societies, governments or organisations.
Also read: What is an altcoin?
The technology behind crypto is a decentralised, distributed ledger (or database) called blockchain. In its simplest, blockchain is a record of transactions made on and secured by a network. Cryptocurrency transactions cannot be forged or reversed, and the fees are relatively low. Plus, there is a level of anonymity provided.
As a new form of cash, the cryptocurrency markets have been known to suddenly boom, and even rather small investments can become a large sum overnight. People who invested in Bitcoin 10 – 11 years ago could be sitting on millions of dollars today. The reality is though, cryptocurrency prices do go up and down, so equally it could be worth a lot less next week than one bought it for today.
Crypto, alto and cryptocurrencies are often used as they are often misinterpreted as being one and the same in the virtual currency arena, but they are actually different: cryptocurrency is the superset, while alto and crypto are its subset categories.
Also read: The rise of bitcoin and blockchain plus.
