Cryptocurrency 101

September 16, 2020

Money: Some of us have it, some of us need it, most of us want more of it. It’s the thing we spend, on average, around 40 hours per week pursuing. It’s the way that we achieve the lifestyle, the security, or even just the toys that we want.

The global system by which money is collected and moving is evolving. Now, in the internet age, faster than ever, technology is changing and a lot of people believe that the system people are generally accustomed to is not keeping up. The solution? Cryptocurrency.

Cryptocurrency is just a system of tokens just like our system of paper money is a system of tokens. The difference is that instead of having a physical piece of paper or a metal coin that denotes a certain value, the tokens exist in a digital space.

Right off the bat, this can be kind of a scary idea to people. If you can’t hold it in your hand, how do you know that it really exists, or that it really has value? Well, those same questions could also apply to the monetary system you’re currently using. How many of us actually have all of our money in physical cash? Most of us are already using a digital system representing our money, and more and more, as payment apps and online banking continue to rise to the norm, many of us are using physical money less and less.

So then what’s the difference? If we’re moving in the direction of digital transaction anyway, why does it matter? One of the biggest selling points of cryptocurrency is that it is decentralized.

In other words, cryptocurrency doesn’t rely on a system of central banks and organizations who are able to influence its value. Rather, its value is defined and the storage and movement of it is within the hands of its users, exclusively. Basically, there’s no middle man influencing a flux in its properties as there is in a central banking system.

Theoretically, because of the strictly digital, and decentralized nature of it, cryptocurrencies also offer an alternative by which global economies could exist on a single monetary standard instead of the current system of many which could drastically simplify trade.

But is cryptocurrency secure? This is actually one of the amazing properties of cryptocurrency and to understand it a little better we should take a look at the word. The first part of the word, “crypto”, is the key. “Crypto” refers to encryption which is to say that a person’s digital money is protected behind a lengthy wall of code which, due to its complexity, is virtually impossible for a person to crack. Even the wall of a bank vault could be drilled through eventually, but a person can’t break through a wall that has no physical properties.

Your digital transactions are also secured by a system called blockchain which is basically a peer-to-peer chain of computers which record and store every exchange made using a given system. The advantage of this, is that this technology takes the power of accountability out of the hands of banks and puts it strictly into those of its users.

MacGuyverTech offers expertise in Blockchain which shows our commitment to working on the forefront of the latest technologies.