Crypto basics
What is crypto? General understanding
A new booming market looks complex to understand right from its basics. All you find on the internet is a pizza purchased with Bitcoins a couple years ago and some articles about decentralised networks.
Yeah, sounds cool and modern, but what is it all about? What is a blockchain actually? Is it another scam project, or this money is backed by something? Let’s dive in!
Cryptocurrency is a decentralised digital alternative to government-issued money. Decentralised means without a third-party control. Third-party institutions are usually banks that have a legal right to share your personal data, demand huge fees for basic transactions, and make you wait for days and weeks to make a transfer. Crypto solves all these problems.
Crypto vs Banks
First off, you are able to transact without a permission from a third-party institution, thanks to a peer-to-peer network. Peer-to-peer means that you transact directly with no need to do this via someone else, which you can’t eliminate with banks.
Most importantly, every crypto user has the fullest control over their assets. Nobody can freeze your money without your consent.
Besides that, you transact world-wide with crypto. You transact whenever you want, and the fees are very low, especially compared to what you usually owe a bank for a money transfer.
We use banks' services because we trust banks. How is crypto secure if it doesn’t have government’s or other legal institution’s control? It’s very simple. Blockchain is the key.
Blockchain in a nutshell
Blockchain is a technology that any cryptocurrency is using. It is a transparent decentralised record of every single transaction made. It’s available for anyone including yourself to see each money transfer.
This chain of blocks is storing this data without letting anyone fake it. By the way, blockchain has never been hacked! You can’t rob a blockchain, too, as there’s no blockchain main building with all the crypto assets, and crypto isn’t a physical unit.
What does crypto to better?
With the use of crypto, you and a person or organisation you interact with will only need to have the access to the internet. Please find a list of major operations that are to be carried out with crypto faster and simply better below.
- Transactions: compared to traditional banks where the transfers can take days or even weeks in some cases, crypto allows you to transact in a matter of seconds with a rare exception of an hour or two of waiting.
- Insurance: you save a lot of money on various types of insurance being paid for with crypto.
- Trading and earning interest:Trading and earning interest: instead of an institution and its workers, the agreements and all the other rules are listed in and regulated by a transparent code called smart contracts. With crypto, you are way less dependent on a human factor.
- Loans: with smart contracts, you can obtain a loan without waiting, extra-paying, fulfilling numerous papers, and feeling anxious about triple-verifying tons of contracts to sign.
- Crowdfunding: crowdfund your ideas to launch a new business faster without bureaucracy formalities.
- Currency exchange: cryptocurrency volatility can indeed be an issue for some but Stablecoins are pegged to more predictable and traditional currencies which makes people feel secure about their money.
By and large, we are here to witness cutting-edge economic development, both financial and philosophical.
Crypto ecosystems provide people with more equal professional growth opportunities regardless of where you were born and where you live, how old you are, what your gender is, or what your religious beliefs are. It’s very encouraging to promote these ideas by taking part in such networks.