A beginner’s guide to the world of crypto
Crypto is a topic that everybody’s heard of yet fewer can explain it in details.
Unless you’ve been living under a rock, you’ve probably heard of Blockchain technology and Bitcoin by now so, follow along to learn more, from what they are (part 1) to how you can invest in them (part 2).
At the time of writing, cryptocurrencies are a hot topic of debate some say they’re the way of the future while others claim that they’re just a fancy way of throwing money out the window.
Maybe this whole thing is Greek to you, and you still wondering what a crypto asset is, well we’re not here to wax eloquent let’s dive into it.
What’s a crypto asset?
A crypto asset is an umbrella term for software and currency.
How do they get their value?
Unlike Oil and Gold, crypto assets are intangible and their value is determined by their software, furthermore Bitcoin like Gold is a store of value asset being both rare and useful. That’s why some people buy bitcoin, not for trading but to leave it so that it appreciates in value over time.
Crypto assets use revolutionary blockchain technology.
Now that sounds good and all, but how do they work?
Put it simply, they’re a massive digital database that records how much of a crypto asset is owned by whom, unlike banks that oversee the transactions of the population. In addition, these databases are decentralized and are constantly updated and operated by the hundreds of thousands if not millions of people running the software on their computers.
Furthermore, here are some properties of a blockchain:
- It’s public any computer from anywhere in the world can access it.
- It’s cryptographic means all data is encrypted.
- It’s immutable, impossible to delete anything from it continuously being synced with and recorded on a worldwide network of computers.
Now I know what you’re thinking, what if someone tries illicitly transferring money into his account? Well if it were to happen, it would be short-lived, see, the blockchain would soon fail to sync up, and his misdeed would be spotted.
So, How did Bitcoin come to be?
Bitcoin is worth the most when compared to other cryptocurrencies because it was the first on the market, its creator Satoshi Nakamoto is tinged with mystery, some believe him to be a gaggle of people, adding an air of eeriness to these obscure origins Bitcoin’s birthday is on Halloween while not directly related it is so to the 2008 financial crisis when it presented an alternative to the financial system that has just been brought to its knees. Bitcoin was intended to be decentralized, not based on trust but on mathematical proof.
