To understand cryptocurrency requires an understanding of fiat currency (a.k.a. currency). Fiat currency is the system used in most countries to purchase goods and services. The term “money” represents the medium used in executing the exchange. The type of currency used in each country is determined by its governing body. For example, the United States uses the dollar (represented by the acronym ‘USD’), Japan uses the ‘Yen,’ and countries in the European Union all accept the ‘Euro.’
Virtual or digital currencies can also be exchanged for goods and services. These types of transactions exist in electronic form only. Digital currencies include many types of transactions: bank transfers, credit card points, points earned at your local grocer, digital discounts, gas credits, and more. If fiat currency is the physical money we use daily that is backed by our government institutions, and virtual currency is any form of electronic points traded for goods and services… What does the “crypto” stand for in cryptocurrency?
Crypto is short for Cryptography. Cryptography is the discipline of securing information. Most military communication through the world is secured by encrypting the data before it is transmitted. The communications are then decrypted on the receiving end using a decryption key. Those who might intercept the message while in transit would not be able to read it. “Encrypting” information is the process of taking normal, human readable information and converting it into secure, indecipherable data.
Cryptography meet currency.
Mash the two together and cryptocurrency is secure, virtual currency.
Cryptocurrency combines the art of cryptography with the power of virtual currency. While a U.S. dollar can be forged by an industrial printer with high-end paper, cryptocurrency is functionally impossible to fake given the complexity of modern encryption methods. Cryptocurrency is not backed by precious metals and is not centrally governed. Decentralization is at the center of what makes cryptocurrencies special. They employ a technology called blockchain, a digital ledger that isn’t stored in a single financial institution’s database, but is powered by encryption and shared across many computers. It is also easy to transfer between parties, and if an institution is needed to facilitate the trade, the fees are much less than today’s wire transfers. Just like every country has different currencies, there are many different types of cryptocurrencies: Bitcoin, Litecoin, Ethereum, and more.
What is the best Cryptocurrency?
Bitcoin was the first Cryptocurrency to gain public traction and is still the top cryptocurrency in use today.
List of Top Cryptocurrencies in 2018:
How to buy/invest in Cryptocurrency in 2018
Like the New York Stock Exchange, S&P 500, and the NASDAQ exchanges – buying and selling stocks for businesses operating in the United States – there are many exchanges available to trade Cryptocurrency. You can trade fiat money for cryptocurrencies on an exchange, however only a few of the exchanges are licensed to operate throughout most of the states.
Once you select a responsible, secure, and licensed exchange – like bitFlyer’s virtual currency exchange – you can begin investing in cryptocurrency with just a few clicks.