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Cryptocurrency is a combination of two words. You must understand both to understand what cryptocurrency is.
One is crypto from the word cryptography. Next is Currency.
Cryptography is the science of protecting information by transforming it into a secure format. It is widely used today. A simple example is encrypted messages. When someone sends you an encrypted email that requires a password or software to be viewed, that’s cryptography.
Banks use cryptography. Whenever you access your bank online, all transactions you do there are sent to the bank through an encrypted system. That whole process of secure transmission is cryptography.
On the other hand, currency is a system of money in general use in a particular country. U.S. has the dollar, Mexico has Peso, Japan has yen, and so on.
Cryptocurrency is, therefore, a digital or electronic system of money created and transacted through Cryptography.
There are many different types of cryptocurrency. There is Bitcoin, Ethereum, Ripple, Litecoin, and others. All these are created through cryptography.
I know what you’re thinking.
Where does it come from? Is it created from thin air? Why does it have a value? Is it like the dollar? Or Stocks? Or Gold?
We will answer your questions one by one. We are here to help you understand what cryptocurrency is, why it has value, and if it is the right investment for you. Click on the recommended posts or any of the links below.