Cryptocurrency is a combination of 2 words – crypto + currency.
So it is …… you guessed it, a cryptographic form of digital currency!
Tell me more!
Transaction details made with cryptocurrencies are encrypted. Only information like the transaction amount remains visible, but other information like sender and recipient identity, transaction item etc, remains anonymous. This gives the users some degree of anonymity, while still maintaining the transparency of the system.
What’s so good about cryptocurrency?
Cryptocurrency is an application of blockchain technology. Since the currency’s value is not determined by a government (unlike fiat currency, aka a fancy term for the money that you’re using now), it can be used in any country or industry that accepts this mode of payment.
Moreover, you will be the only one that has access to these crypto funds. No external entities or the government has the right to access or freeze your funds. The peer-to-peer nature of the system will also lower transaction fees, reduce unnecessary operational procedures, and tackle privacy concerns.
Ohhhh… so is cryptocurrency like Paypal or Paylah?
Nope! But yes……
Some parts are similar – both require the Internet to make payment through an electronic device such as your phone or computer, and they’re both peer-to-peer transactions.
However, the type of currency is different – e-payments uses fiat currency, while decentralised cryptocurrencies are not issued by the government. Cryptocurrency transactions are permanently and publicly recorded on the blockchain, while e-payment transaction details are only known between you, the bank, and the third party.
What types of cryptocurrencies are there?
Cryptocurrencies started with Bitcoin in 2008, deemed by many as the grandmaster of all cryptocurrencies. However, other types of cryptocurrencies (both coins and tokens) started to appear as well, first with the Litecoin (LTC) in 2011 (as an alternative to bitcoin), Ripple (XRP) in 2012, Monero (XMR) in 2014, Ethereum (ETH) in 2015, and more! Like…… 2,392 types (as reported on Coinmarketcap), or 2,790 (Investing.com) types of cryptocurrencies at time of writing.