Day 1: Introduction to Cryptocurrency
Hey there, crypto-curious friend! Welcome to the wonderful world of cryptocurrencies. If you're just getting started with crypto, don't worry - it's not as complicated as it may seem. There are no reasons for you to be intimidated in this space, we'll take it slow, break it down, and explain everything in simple, easy-to-understand terms. So, sit back, relax, and get ready to learn about the world of crypto. By the end of this series, you'll be a crypto pro. Now, let's get started and have some fun.
Cryptocurrencies like Bitcoin and Ethereum have taken the world by storm in recent years, and they're only getting more popular. But before you jump into the crypto craze, it's important to understand the basics which will become the stepping stone for you to learn and understand advanced topics in the cryptocurrency and to truly see the excitement in it. Also, you won’t be like me when I started in the space, which was quite rough in the beginning and that was partly because I had no access to a community and content like the one you are reading now.
But then, my crypto journey started way back and at the time there wasn’t this much rave about crypto as we have today.
The first time I would know about Bitcoin was in 2016. My friend was talking to me about it and how we can make a lot of money from it. I didn’t know where he had read or heard about it and I didn’t bother asking because I wasn’t interested in the whole Bitcoin discussion. Besides, the way he explained Bitcoin to me made it seem like Bitcoin is just another Ponzi scheme and not a digital currency built on Blockchain Technology. Well, my friend did not know of this at the time so he explained Bitcoin to me to the best of his knowledge.
So, I wasn’t interested but hey, you can’t blame me, can you? There were a lot of Ponzi schemes back then and I had lost my money to a few. So, his talking to me about Bitcoin at that same time didn’t interest me that much but I listened anyway. My friend understood Bitcoin as something you invest some funds into and after some time, it rises in price and your investment grows too, which is partly true but I later came to realize that there was so much more about Bitcoin such as the technology behind it and its potential to change nearly every industry from finance and education to government and fashion.
Anyway, my friend managed to convince me to buy some Bitcoin, and yes, I gave in. Mind you, I still didn’t know that Bitcoin was a cryptocurrency at the time. I saw it just the way my friend explained. I didn’t do any further research, I never tried to learn more, and I didn’t care about learning the basics and involving myself in how it works. I just wanted to double my money, cash out, and run which worked in my favor.
Today, there are still many people out there who see Bitcoin the way my friend and I did in the past. Always scared to tread down the crypto path because they still think it is a Ponzi scheme and shy away from or ignore resources such as this one that will help them demystify and learn about crypto. The subject – crypto – may seem complex on the outside maybe because of how people talk about it but when you take a step inside you will see how simple it is and in no time, you will get carried away from the excitement.
I didn’t know what Bitcoin was when I first bought a few units many years ago and afterward, I didn’t bother learning about it until sometime in early 2018. If I had started with learning the basics of cryptocurrency, the many mistakes I made along the line would have been avoided. But hey, you don’t have to be like I was when I entered the crypto space and it is my utmost desire to help you understand cryptocurrency whether this is your first time hearing or seeing the word – crypto.
With our deep desire to preach and spread the crypto gospel and your crypto-curious mind, learning about crypto would be a piece of cake for you.
What is Cryptocurrency?
Cryptocurrency is a digital or virtual currency that exists only online but is used like regular money to buy things online and even offline these days or trade them for other currencies. Instead of being printed like normal money, cryptocurrency is created through a process called "mining", and it is not issued or controlled by any government or financial institution. This “mining” is kind of like finding gold or other precious metals, but in this case, you're finding virtual coins.
Unlike regular money, which is controlled by banks and governments, cryptocurrency is decentralized, meaning it's not controlled by anyone therefore a lot of people see crypto as the future of money and that is why there is so much attention around it.
The History of Cryptocurrency
The history of cryptocurrency is not a deep one but it is quite mysterious.
The first cryptocurrency was Bitcoin and it was created in 2009 by Satoshi Nakamoto, a mysterious person whose identity is unknown to this day. We don’t know if this person is a man, a woman, or a group of people. All we know is that they created Bitcoin and went AWOL.
The idea behind cryptocurrency is to create a digital currency that is not controlled by the government or financial institutions like banks rather it would be controlled by the people who use it which are the masses like you and I. Through this idea, Bitcoin was born, a few years later other cryptocurrencies like Ethereum, Ripple, Stellar, Binance Coin, and the many other cryptocurrencies circulating in the market today followed all with the same origin as Bitcoin but each with its own unique and diverse use cases.
Bitcoin, as well as other cryptocurrencies, is built on Blockchain Technology – this is an entire course on its own and I won’t go into it here so that you don’t get overwhelmed. Let’s just concentrate on what we are here for – Introduction to Cryptocurrency.
Well, that is all on the history of cryptocurrency, told you it is not so deep just mysterious because we have no idea who the creator of such amazing innovation is. And even with all the crypto craze they never came out to take glory, crazy right?
How Cryptocurrencies Work
Cryptocurrencies work nearly like fiat currencies, that is, normal money like the USD and Naira. The similarity between them is that they can be used to pay for goods and services online and can be traded with other currencies. However, fiat is printed and controlled by the government and financial institutions but cryptocurrencies are not printed, rather they are mined which I explained earlier, and they are not controlled by a single authority.
Also, crypto is unique, it can not be copied or faked. Every cryptocurrency today has its unique name, design, and use case.
Now, here is how cryptocurrency truly works, read it carefully and slowly, and do not allow it to overwhelm you…
Crypto is built on Blockchain Technology, a special kind of database that's used to record transactions sort of like a ledger but an unchangeable one that tracks and records assets and trades, and that is not all. The technology – Blockchain – also uses a special kind of math called “cryptography” to provide maximum security to anything stored in it. Now, since the Blockchain is the powerhouse of cryptocurrency because it is stored in it, cryptocurrency also makes use of the ledger-like properties and cryptography of the blockchain.
The ledger-like property displays all cryptocurrency transactions in real-time as they are executed and this is also one of the unique features of this technology - Transparency. You can see cryptocurrency transactions as they are made from different parts of the world, nothing is hidden. Every crypto transaction ever made is there for you to see with zero restrictions and this data can be pulled out in just a few seconds. Everyone, anywhere in the world with a smartphone connected to the internet can see these transactions updated in real time.
Then the cryptography ensures the security of cryptocurrencies whether they are just sitting there in your crypto wallet or you are sending it to someone else during a crypto transaction. Yes, the blockchain is also designed to have a wallet where you can safely store your crypto. It is from this wallet that you will send and receive cryptocurrencies from one person to the other. There are other resources here for you to learn about crypto wallets, visit them immediately.
You can send and receive cryptocurrency such as Bitcoin, Ethereum, USDT, BNB, etc. from different parts of the world without having to fill out online forms or do any paperwork. The transactions are made through a crypto address. If it is Bitcoin you want to send or receive, then it is a Bitcoin address, and if it is Ethereum then it is an Ethereum address, and so on. These addresses work just like bank accounts but in this case, crypto addresses are longer with a mixture of upper case and lower case letters and numbers and impossible to cram.
So basically, crypto cannot work nor function without blockchain technology, this is its powerhouse. It is to humans how the heart and brains are and just as humans cannot function without these parts, crypto cannot function without blockchain.
Conclusion
So, after reading this introduction to cryptocurrency, you should now have a better understanding of the basics of this exciting new technology. From what cryptocurrency is all about to its mysterious creation (history). Cryptocurrency is a lot like a rollercoaster - it's fast, it's thrilling, and it's full of ups and downs. As more and more people learn about this new technology, we'll see even more innovation and progress.
But don't worry if you still have questions - that's normal! Cryptocurrency is complex, and there's a lot to learn. The most important thing is to take your time and educate yourself. With a little bit of effort, you'll be a cryptocurrency pro in no time. So, hang on tight, because this is only the beginning of the cryptocurrency revolution.
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