Cryptocurrency is a form of digital currency and exchange of value that is maintained and transacted through blockchain technology. This allows it to be decentralized and without the need for or control of middlemen like banks, payment processes or governments. The idea of digital currency has been around since the 90s, however it was not until the creation of Bitcoin in 2009 that we realized a new alternative for financial autonomy.
A "blockchain" is a digital ledger of transactions that is created and distributed across an entire network of peer-to-peer computer systems. It is done via cryptography which is the study and application of secure communications techniques that allow only the sender and intended recipient of a message to view its contents.
The “block” is composed of chunks of encrypted data. Each having its own specific code. The “chain” is the public database where the blocks are stored and sequentially related. When a new request is made, such as the creation or transfer of a coin or token, a “block” is created. It is then validated by the protocol. This system dictates how the computers in the network, called nodes, should verify new transactions and add them to the database.
No middleman is needed for validation. No bank to process a transfer or government to create the currency. When specific conditions are met in accordance to the protocol, the transaction will automatically carryout. That block will then be recorded and linked to the end of the blockchain. It cannot be manipulated without affecting that entire blockchain, making them nearly tamper-proof.
Bitcoin is the first cryptocurrency in existence. It sparked the movement for the decentralization of money. It made the theory tangible and brought it to life using blockchain technology. Find out more in the BTC JOURNEY!
Traditionally, money is in the hands and control of governments or banks. We as individuals have no input or power over it. Cryptocurrencies are the opposite of this, where everyone can join the network and it is not at the control of a single institution. It takes out any middle man. Removing distrust from the equation is a huge step for the future of money with the aim of having no single entity control or manipulate it.
Information on the blockchain cannot be deleted or altered. All transactions or blocks, are linked to the previous and subsequent block. If an entity tries to delete a block, it will cause a break in the entire chain. If someone tries to alter a block, it would also be out of consensus with the entire network as transactions are stored on multiple computers/nodes. This results in the transaction being rejected and increases security against manipulation of data.
Blockchain is both private and transparent. There are 2 “keys” involved in transactions. The first key is private. It authorizes/initiates a transaction by an individual entity and is only known by the owner. The second key involves the blockchain protocol which approves and implements that transaction, adding it to the blockchain. That second key is the transparent part of blockchain. While only a private owner will initiate an activity like the purchase of a coin, and their identity is protected, the transaction itself is on the blockchain and viewable to all. This will have a great impact on several industries including food supply chains and money wiring.
Blockchain gives life to crypto through its ease of accessibility. All you need is a smart device, an internet connection and instantly you can become your own bank making payments and money transfers.
There are over two billion people with access to the Internet who don't have rights to use traditional monetary exchange or finance systems, especially in developing nations. Crypto will open up a world of investing and access to capital currently out of reach for so many.
Transactions are extremely fast in comparison to standard wire transfers, especially when it comes to international transactions.
Cryptocurrencies are in no way limited by borders. Though it is currently largely unrecognized as legal tender on national levels, it is also not subject to the exchange rates, interest rates, transactions charges, or other levies imposed by a specific country. There are no requirements beyond needing an internet connection. It’s a borderless, inclusive and open system.
While there are fees associated in many crypto transactions, they are not comparable to the amount of fees you are subject to through bank accounts, credit cards or traditional money transfer and wire methods.
There are currently thousands of unique cryptocurrencies or altcoins in circulation worldwide. Many created with different utilities that spotlight the versatility of the industry. Supply chain, cloud storage, payments, and oracles are just a few of many examples.
Blockchain technology has wider reaching implications outside of providing a form of monetary value. Its automation, transparency and decentralization can be applied to various industries, creating a new universe of use cases. The projects that develop these different applications often create their own crypto coins or tokens to incentive the marketplace to support the technology. Industries like agriculture supply chain to healthcare, and even charity can benefit from blockchain technology. Below are a few examples.
Theta is an open-source project that provides e-sports, music, TV/movies, education, enterprise conferencing, peer-to-peer streaming, and more. It is not run through a centralized database like YouTube but is decentralized ensuring that Theta is powered by users.
Vechain uses Blockchain to enable transparent data flow within organizations. One of its uses is to record the origins of materials and track its movements. This would allow companies to verify the authenticity of their products, along with such common labels as “Organic,” “Local,” and “Fair Trade.”
Enjin is a blockchain based gaming platform that focuses on making player-owned digital items like "NFTs" (non-fungible tokens). They offer ways to create tokens that can be used across multiple video games and various platforms from PC to mobile. Players can now have true ownership of their assets, and trade them in and out of games.
Automation of the blockchain technology would allow for around the clock operations and fast processing of transactions.
Health care providers can leverage blockchain to easily and securely store their patients’ medical records with the proof and confidence that the record cannot be changed either on purpose or in error.
Blockchain can boost voter turnout and make voting tamper-proof. The blockchain protocol would also maintain transparency in the electoral process, reducing the personnel needed to conduct an election and providing officials with nearly instant results. This would eliminate the need for recounts, and any concerns that fraud might threaten the election.
Contracts can now be managed in an secure and automated way. Smart contracts are managed through a computer code built into the blockchain to facilitate, verify, or negotiate a contract agreement. The users agree to a set of conditions, and when they are met the contract is carried out.
Example smart contract: If a potential tenant would like to lease an apartment using a smart contract. The landlord agrees to give the tenant the door code to the apartment as soon as the tenant pays the security deposit. Both the tenant and the landlord would send their respective portions of the deal to the smart contract, which would hold onto and automatically exchange the door code for the security deposit on the date the lease begins. If the landlord doesn’t supply the door code by the lease date, the smart contract refunds the security deposit. This would eliminate the fees and processes typically associated with the use of a notary, third-party mediator, or attorneys.
Crypto collectibles or non-fungible tokens (NFTs) are virtual items stored on a blockchain. Just like sports cards or Beanie Babies, each item is unique or exists in a limited quantity. And, similar to Magic the Gathering decks and Pokémon cards, NFTs can often be used in competitive games and other contests. Because crypto collectibles are stored on a blockchain, they offer many of the same benefits that cryptocurrencies do: easy to trade, hard to counterfeit, and provide guaranteed ownership.
The first crypto-tokens, such as Bitcoin, were designed to be fungible. That is, each Bitcoin is identical, and the system was designed for the tokens to be interchangeable, and to hold the same unit of value. Like traditional collectibles, the value of an NFT digital collectible is in its ability to be distinguished, or unique. In order to do so, digital collectibles are created, identified, and transferred, as a unique token. They cannot be divided, and represent one unique asset in its entirety.
Thanks to the blockchain, and distributed ledger technology, the sale and movement of these NFT’s can be traced, verified and recorded on an immutable ledger. This means that their creation, unique identifiers, and ownership is not only traceable, but also verifiable. There can only ever be one owner of an NFT at any one time.
Cryptokitties was a great example where five of the rarest digital kittens were sold for over $100,000 each. Then NBA Top shots took rare highlight film moments from the top NBA athletes and turned them into short video clip collectibles and has seen a major soar in popularity. And most recently the popular online artist “BEEPLE” sold one of his most famous paintings as an NFT for $69 Million!
