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What is cryptocurrency? They say crypto is the future, but what is it exactly? In this blog, we’ll define cryptocurrency as less intimidating and less confusing as possible.
Also, learn how it was established and how it works for new investors. Then, let’s find out what is cryptocurrency and learn more about the first-ever transaction that used cryptocurrency!
Cryptocurrency Definition For Beginners
Cryptocurrencies—like the most popular Bitcoin and Ethereum—may often appear confusing, not to mention intimidating because of their pricing volatility. Hence, our mission is to make cryptocurrency knowledge more accessible to the public. In ways that are easier to comprehend and apply in real life.
Welcome to CryptoCoin Believers! We are crypto enthusiasts who have faith in the power of cryptocurrency. We believe in its capabilities in empowering our economic and financial future.
So, we hope this post will serve as a guide in cryptocurrency for beginners. Let’s start with a simplified version of the origin and background of this controversial currency.
What Is Cryptocurrency? Meaning for Beginners
Cryptocurrency—a curious word. The Greek word ‘crypto’ means ‘secret or hidden’ and ‘currency’ came from the Latin word ‘currere,’ which means ‘to run.’
Around 1699, ‘currency’ came into use to describe the ‘flow of money between people.’ In other words, a cryptocurrency is a discreet form of money exchange.
What is cryptocurrency? In its modern definition, cryptocurrency is a digital currency where transactions are verified and recorded by a decentralized system using cryptography.
Crypto as a form of money has its roots coming from the Internet. As a digital currency, the central authority or any third-party money processor doesn’t regulate or monitor it.
Nevertheless, this doesn’t mean that clients can abuse or manipulate cryptocurrency. Secure ledgers act as storage for cryptocurrency transactions. Moreover, several verification processes are conducted to ensure the safety of these transactions.
Learn about different types of cryptocurrency: Different Types of Cryptocurrency: Overview and Examples
Who Invented Cryptocurrency?
The roots of cryptocurrency go way back to 1983. That is when David Lee Chaum, an American cryptographer, devised a cryptography-protected form of nameless electronic. He introduced this idea in his conference paper and it is considered to be the first virtual currency. He espoused the idea of a form of money that is decentralized and untraceable.
Additionally, Chaum also created a prototype of the current cryptocurrency named Digicash. This software facilitated fund transfers between banks and users. Also, a definite set of encryptions guaranteed the protection of funds.
Apart from David Chaum, another cryptographer named Nick Szabo designed Bit Gold in 1998. People believe that Bit Gold is the ancestor of Bitcoin. Furthermore, Bit Gold was the reward for successfully solving cryptographic puzzles.
Today’s crypto mining came from this process. However, Szabo could not figure out a way to prevent double-spending on Bit Gold. Such a problem is solved by present-day blockchain technology.
Who is Satoshi Nakamoto? The Father of Bitcoin
The year 2009 was a bleak time for the economy. That was the biggest recession that occurred after World War 2! Around that time, Satoshi Nakamoto presented his white paper titled “Bitcoin – A Peer-to-Peer Electronic Cash System.” This paper introduced Bitcoin to the world as a form of digital asset and a way of transferring money worldwide.
Moreover, Satoshi Nakamoto created the first-ever secure blockchain network. Which is still the same technology we are using today for various cryptocurrencies.
Consequently, Nakamoto created Bitcoin and completed the safeguarding protocols of Blockchain. With the goal to make money more accessible to the public. And more importantly, to reduce the classism involved in the financial sector. Blockchain is the medium of verifying transactions that makes Bitcoin and other cryptocurrencies reliable for wide usage.
Satoshi Nakamoto is just a pseudonym, and it was derived from the Japanese language. Satoshi means ‘wise,’ ‘intelligent,’ or ‘quick-witted.’ While Nakamoto means ‘central origin,’ or ‘someone who lives in the middle.’ When combined, it means ‘Central Intelligence.’
People have speculated that Bitcoin was a project by the National Security Agency. But no one knows for sure who Satoshi Nakamoto is. It can be a single genius or a group of geniuses behind the birth of Bitcoin. Until now, their true identity remains a mystery.
Bitcoin Price History
Bitcoin was the only one of its kind back in 2010 and its price was just worth a few cents. It achieved a value of $1.06 in February 2011 but fell to 87 cents. Thanks to a Forbes April 2011 article, the value of bitcoin rose to $8.89.
Bitcoin (BTC) price hits new all-time high in 2021 as it reached $68,789 in November 2021. And as for the end of 2022, Bitcoin market capitalization predictions range from $10k to $28k, according to NextAdvisor.
Surely, Bitcoin had a rough start but it constantly shows promise which paves the way to its gaining a steady valuation. The plummeting prices it experienced in the January 2018 and May to June 2022 crashes did not affect its stature. Still, Bitcoin is one of the best cryptocurrencies to invest in! Somehow, it always finds a way to bounce back.
The recent sharp decline in Bitcoin’s price negatively impacted its hold on investors. But, the Changelly blog predicts an 11% increase in BTC’s value. They forecasted that BTC will probably end the year with a price of $22,958.
Additionally, the word is going around. The first Bitcoin spot exchange-traded fund will get the green light this year from the Securities and Exchange Commission (SEC) (Read article from CNBC.com). Bitcoin Spot ETF tracks the price of BTC. In turn, investors gain access to BTC and can sell them following the tracked actual price.
How to Invest in Cryptocurrency?
People who plan on investing in or trading cryptocurrency these days can do so more easily. Thanks to cryptocurrency exchanges such as Gemini, Uphold, Coinbase, Binance, Kraken, Bitstamp, and eToro. These top user-friendly platforms or sites offer numerous cryptocurrencies to trade (buy and sell).
These exchanges facilitate buying cryptocurrencies and protect your assets with private keys. The most popular cryptocurrencies are usually the ones with a huge market cap. Based on the data of Forbes, around 600 crypto exchanges exist with some of them supporting smart contracts.
Bitcoin Pizza Day: A 687 Million USD Dinner
The first-ever recorded transaction that used cryptocurrency was the two Papa John’s Pizzas Laszlo Hanyecz purchased on May 22, 2010. At that time, businesses did not yet accept BTC as a form of payment.
So, Hanyecz posted his offer on Bitcointalk.org where Jeremy Sturdivant, a 19-year old California student, took up his offer. Jeremy bought the two pizzas at $41 in exchange for 10,000 BTC!
Imagine its value in BTC's all-time-high, that could have been a whooping 687.8963 million US$ in November 2021!
Eventually, the Bitcoin community recognizes May 22 as Pizza Day and they commemorate it by buying two pizzas and sharing. Pizza shops also offer discounts to customers who pay Bitcoin for their pizzas.
Final Word on Cryptocurrency for Beginners
The numerous speculations about how cryptocurrency works do not define its true nature, and neither do the news headlines. Undoubtedly, crypto is evolving at a fast pace as its leaders continue working to make it more reliable.
Being open-minded is important when learning about cryptocurrency. This new technology holds infinite possibilities. Its complete integration in the real world and our lives may happen faster than we know.
Further, Bitcoin’s release signaled a new era where people are more directly in control of their assets. There has been growing distrust towards financial institutions over the years. Several people pin their hope on cryptocurrency as the answer.
This Cryptocurrency blog is only the first of a series that we have prepared for you. Tune in to more CryptoCoin Believer posts! And join us in our vision to empower lives by learning more about Crypto!