Cryptocurrencies for Dummies: The Basics
The aim of this article is to be a very simple explanation of what currencies like Bitcoin actually are and why they are an impressive new technology and not just a commodity you can get rich off of if you get lucky.
Bitcoin (and to an extent, cryptocurrencies as a whole) have taken the internet by storm within the last few weeks, causing a huge collection of people who currently hold a portfolio of cryptocurrency to not fully understand what they’re dealing with.
The impressive new technology I mentioned in the introduction is the basis of every cryptocurrency and it’s called a blockchain.
A blockchain is a distributed collection of public records.
In the context of Bitcoin, this means that every single Bitcoin transaction that has ever occurred has been stored on the Bitcoin blockchain.
Anyone who has a copy of the Bitcoin blockchain on their computer can check the public ledger and observe any transaction that has taken place.
You can view any transaction and any wallet by searching its hash.
This adds transparency to an asset that has always been secretive.
It’s not just currency that can benefit from a blockchain.
Any industry that has previously relied on any type of record management system can also benefit from implementing blockchain technology and a lot of entrepreneurs are trying to take those opportunities.
Examples of few industries that will benefit from blockchains are:
- Transaction processing (Cryptocurrencies like Bitcoin and Ripple)
- Identity management
- Food traceability
- Medical records
You’ll likely hear the word ICO mentioned a lot as you start to do more research in the cryptocurrency space: an ICO is an Initial Coin Offering, this is when a new coin tries to raise money by pre-selling tokens before becoming publicly available.
If you find the right ICO and it goes on to be highly successful, you’ve struck gold. However, I highly advise you avoid ICO’s like the plague, a lot of them are scams and a few have even plagiarised their whitepapers.
If you really want to get involved in an ICO, do your due diligence, read its whitepaper and then proceed.
Thanks for reading!
This article will be actively edited and expanded upon.
In a follow-up article, I’ll discuss the differences between Bitcoin, Litecoin, Ethereum and Ripple so that you can compare and contrast how useful they are.
Want to keep track Cryptocurrency prices from your iOS or Android device?
Install the Expo app and scan the QR code on this page: https://expo.io/@gregjw/snack-SkYu_YHWG
If you’re a programmer, Krypt’s code is on GitHub, it’s in React Native: https://github.com/gregjw/krypt