Hello to Cryptocurrency
No question is too silly
The evolution of money has gone through;
- Barter trading
- Backed by assets such as gold, diamond or silver
- Paper money
- Mobile money
- and more
There have been many other forms in-between. And as always, everyone is looking at the new avenues via which they can continually make, grow and keep their money. One option growing in popularity is Cryptocurrency.
Together, we must seek as much knowledge on the subject as possible. On our mission to understand as much about cryptocurrencies as possible, there are no stupid questions.
As simplistically as possible and with no jargons, here are the four top things you should know.
What you should know
1. What is Cryptocurrency ?
Long gone is the cash in the mattress but its tied up in hashes in encrypted badges - YTCracker from the song Bitcoin Baron
Before defining what is a cryptocurrency, we must first define what a Blockchain is.
A Blockchain is an ever expanding list of records which are linked together using .
Therefore, cryptocurrency is based on . Thus, it is inherently;
2. How does it compare to other currencies ?
If I have to choose between you and me, I like me better - Charlaine Harris
Cryptocurrency is fundamentally different from a traditional currency, and thus changes the status quo on how we will perceive money, for now and the future.
Cryptocurrency can do what other currencies do ,which is to serve as a means of payment for goods and services.
Again, just like currencies there are several cryptocurrency options like the Bitcoin, Ripple, Ethereum, Stablecoin or Dia.
This is one huge and diverse difference as compared to traditional currencies.
It has no central authority.
This makes it an interesting choice for trading. Its value is based strictly on demand and supply, since there are no national or governmental interferences whatsoever.
However, commonly used types of monies like the Dollar, Pound, and Yen are watched over by their independent national banks. Even the regional currencies such as the Euro have a controlling body.
The effects of having a controlling authority means that these authorities can put into force financial restrictions, even the devaluation of a currency if necessary. Cryptocurrency is free from such restrictions.
3. How is a cryptocurrency written ?
I’m looking in the mirror and I see a dollar sign. I had a cat scan and I had money on my mind - Lil Wayne
Whilst the Dollar is denoted as $, the different cryptocurrencies have their own symbols.
For example, Bitcoins are denoted with BTC. Therefore one Bitcoin will be written as BTC 1.
4. How can I obtain cryptocurrency ?
We can do this the easy way or the hard way - Vincent from the movie Excess Baggage ( 1997 )
The hard way
Cryptocurrencies can be obtained through a process called mining.
Like the term mining, it refers to the process of creating or printing this digital money. It is a computationally heavy, intensive and an expensive process, involving alot of super computers, long hours and effort.
The easy way
The easier and more common approach to obtain the different types of cryptocurrencies is by an exchange.
You may exchange traditional money( such as the Cedi, Naira, or Dollar ) for goods or services. Currently, there are several sites who offer services for Bitcoins.
Why should You care?
Currency is like God, it exists as long as people believe in it - Abhijit Naskar, The Gospel of Technology
Well apart from staying in the know about what is happening, you should all care for the following reasons:
It is secured against fraud
There are unfortunately fake currencies circulating in trade. With cryptocurrencies however, the amount of encryption and transparency that it is passes through reduces that to nil.
All the preceeding addresses have to be corrupted or manipulated for this to happen. The amount of processing power and cost required for this to happen negates the effort.
It is a futuristic means of payment
In the not so immediate past, money was stored under our mattresses and pillows. However, people have become wiser. Thus, it has become more and more important to save our money even more securely.
People also want to be annoymous when making some transactions, For example is with charity donations. Cryptocurrency checks both these boxes.
You need to get ahead of the curve
Your customers may even want to start paying in cryptocurrencies. And if you do not accept cryptocurrencies, what happens? You will lose your current customer base. This means that you need to start adopting and switching to where your customers are moving towards.
However you look at it, you will wish you had put more action after reading this post.
It is a novel and interesting way to invest
Since the value of most cryptocurrencies depend on the law of supply and demand, the value could change minute by minute. Thus, exchange rates are more volatile as compared to traditional currencies.
With the ability of a cryptocurrency to change in value from one second to the next, it is an interesting way and to increase capital. You could buy some when the value is low and cash out when it reaches a high enough valuation in your sight.
It can be enormously rewarding if you join early enough and know when to cash out before the value of that cryptocurrency falls.
What do you do next ?
Cryptocurrencies are gaining more convents and widespread appeal. It is undeniable that many are joining the wagon now, and many more will join soon.
The use of cryptocurrencies are coming like a Tsunami. There is no use fighting against it. Instead, prepare for this new way.
The use of cryptocurrency is growing. We may only be a few years instead of a few decades before it turns into mainstream use. Cryptocurrency is all around us. Imagine, our 60 and 70 year old parents, pastors and would soon be sharing their wallet address. What an interesting time it would be!
Reach out to me if you want to know more. Thanks for your time. And we will talk again later.