cryptocurrency
what are 'cryptocurrencies'?
A cryptocurrency is a decentralized network which enables all peers to exchange digital money without the need of a central authority or intermediary. At first this might sound ordinary to you but among many experts cryptocurrencies and their underlying technology called Blockchain is considered to be the most revolutionary technology since the invention of the internet.
The history of 'cryptocurrencies'
So where has everything started? The answer lies in the last banking crisis in 2008. In this year Satoshi Nakamoto invented Bitcoin. Bitcoin was a new sort of digital cash. The revolutionary aspect was that for the first time in the history of humankind, people around the globe were able to securely execute p2p (peer-to-peer) transactions without the need of any central party involved.
Satoshi solved one major issue that all previous attempts failed to solve, the double-spending issue. If you transact money from one one place to another, a central bank is accounting every transaction. In a cryptocurrency there is no such central party. Therefore all participants in the network have to keep record of all transactions and have to control that no coins are getting double-spend in the future. Satoshi’s answer to this issue was the so-called distributed consensus concept.
Characteristics of 'cryptocurrencies'
Cryptocurrencies are basically one of thousands of possible applications of Blockchain technology. It is basically enabling the exchange of digital money, within a decentralized network, without the need of any central intermediary. If you want to understand how this works out in a completely secure way, check our article about Blockchain.