Cryptocurrency in simple terms – who invented it and why
If you explain what a cryptocurrency is in simple terms, then we can say that this is a very secure way to make money on the Internet. But in fact, there is much more to this phenomenon. Cryptocurrency has no physical analogues. In the common people, this type of money is called “crypto". They love it and believe in it even in our country, despite the fact that here it is not yet regulated by law. In the information noise, it is quite difficult to make out who provides the facts and who manipulates the data. you do not understand anything, but want to understand – start with this article.
Cryptocurrency, as a phenomenon, caused such an arrangement among the people due to the security of transactions. The crypt uses cryptographic security technologies. They allow you to get rid of such an obsolete link in the process as an intermediary. Crypto money is encrypted in such a way that it cannot be stolen, changed or hacked. But first things first.
Cryptocurrency in simple terms – the first bitcoin coin
Bitcoins are the first digital money. They appeared as a response to solving the problem with online payments. The reader may object that the current system works fine.
But try to remember. Have you ever had problems paying online? We remind dear reader that all payments on the Internet go through either banks or credit companies. From each transaction, these systems take their percentage. We trust them with our money, they have all the information about our financial transactions. If you have nothing to hide, then, it would seem, what is the problem? Patience reader. Everything is simple.
Time passes and the number of transactions increases. The population is massively switching to online payments. After all, it is fast, simple and convenient. The more transactions, the more acute the issue of the security of users’ personal data becomes. At the same time, the intermediary (bank or credit company) receives more profit from operations and can change the conditions of the game at any time. To get even more from other people’s transactions.
Why do you need an intermediary
Indeed, why do we pay out of our own pocket to banks and credit companies? For the possibility of transferring funds, you can answer. And try to imagine that there is no intermediary. We remove it and the problem is solved?
This is exactly how cryptocurrency works. But we are getting ahead of ourselves.
Suppose we make a payment in an online store, bypassing an intermediary. How to prove that the purchase has been paid for? Or that you have the right amount? A guarantor is a guarantor. The absence of a guarantor is a problem. It even has a name – “double spending problem”. But we are not talking about that now.
Cryptocurrency in simple terms – who is Satoshi Nakamoto
It is believed that in 2008, the anonymous programmer Satoshi Nakamoto found a solution. You can find a lot of conflicting information about the reality of a given person. Someone believes that this is not one person, but a team of several developers. But for us now it is not important. Another fact matters.
10 years ago, a popular crypto blog published an article detailing the payment system. Subsequently, she solved the problem with the intermediary and security issues. This has greatly facilitated the life of Internet users. Paying has become easier. Now let’s explain why.
Cryptocurrency in simple terms – what Satoshi Nakamoto suggested
This article provided two ingenious paths to a free online economy:
- Instead of banks and credit companies, all users should keep records of all transactions at the same time. As a result, any attempt to deceive the network will be noticed and the payment will be rejected. Thus, no one can take a bribe like an intermediary. Even the users themselves are deprived of this privilege.
- The movement of transactions does not depend on the preferences of the participants. Nobody can control the process. This method of interaction turned out to be the safest. Decentralized transactions have begun to change the world. First online, then offline.
It has become easier, cheaper and safer to spend money, regardless of the geography of the participants in transactions. Still, because this type of operation is not covered by the policies and laws of countries. This is technically impossible. But the emergence of new monetary units became possible. Brand new.
Bitcoin was the first currency to enter circulation in the new system.
Cryptocurrency in simple terms – how bitcoin has affected people’s lives
Several months have passed since the publication of the article. Bitcoin was used to buy and sell goods. Since the transactions could not be traced, the cryptocurrency became a black market currency. However, bitcoin did not stay underground and went beyond the darknet to the laity.
Today, bitcoins are accepted in online stores, in London they are exchanged for beer. Some advanced universities charge tuition fees in bitcoins.
We have labeled this chapter as problems, but what is an embarrassment to some people is profitable to others. Now we will explain everything.
When bitcoin appeared, not everyone appreciated the prospects. Those who joined the process early, now not particularly bothering, have provided themselves and, at least, their children, a comfortable life. They purchased real estate and movable property, invested in stocks and continue to invest in cryptocurrencies today. These are the pioneers.
Of course, not all primary investors are now reaping the fruits of success. In crypto investing, it is easy to get primary profit, but it is difficult to keep and increase.
This is used by experienced traders. And now no one has any doubts about the future of crypto. People open companies and massively buy bitcoins. Where will all this lead? After all, bitcoin is not infinite.
Bitcoin coins are limited. Therefore, its future is not defined.
You must have heard different opinions. Some people think that cryptocurrencies are the future. Someone is worried that playing with electricity will destroy the world economy.
But no one has yet spoken out against the very essence of the idea, which is that only a world currency without intermediaries is capable of changing the economy for the better.
What do you think of all this?