Introduction

Is cyptocurrency real money?

Cryptocurrency is an internet-based currency digitally created to be used exclusively within the digital space. There are no physical coins with cryptocurrency, which is one of several advantages presented over traditional paper and coin money.

Many people still find it difficult to understand the basic concepts of cryptocurrency CryptocurrencyCryptocurrency is an internet-based currency digitally created to be used exclusively within the digital space. , but despite this and its relative infancy in use, the financial world is taking it very seriously.

The fast-paced nature of cryptocurrency’s growth means it is now more common than not for banks around the world to cater for cryptocurrency and offer service to users.

This is because the concept of cryptocurrency is revolutionary in its function and can shake up world financial markets and institutions as we have known them for centuries.

Money has had several different forms over history, from tradeable goods like food, to gold, to receipts representing gold value later going on to become legal cash tender. While the value of cash no longer correlates with the value of gold, it has still formed the backbone of how we know currency to function for well over a century.

This status quo changed with the introduction of credit and digital transactions, making cash all but redundant and issuing in a new age of currency.

But despite what looked like obvious changes in how the world handles money, some basics remain the same. Legal tender, whether cash or digital, is known as fiat currency and is still reliant on a central governing body to give it its value.

Governments enact policy to encourage rates of inflation and deflation, depending on supply and demand and the general performance of the currency.

Banks are also in charge of making sure digital tender transactions are performed correctly, overseeing and charging a fee for every single digital purchase and sale happening all over the world.  

Fiat currencyFiat currencyOvernment-issued currency that isn't backed by a commodity such as gold.

How is cyptocurrency different? 

The fiat currency concept remains the most common form of financial transactions throughout the world, but for the first time in decades there is a viable alternative designed to improve on fiat currency’s more useful features while doing away with its disadvantages.

3000

There are over 3000 types of cryptocurrencies in circulation, most of which function under the same core premises - they do not have anyone in charge. No one decides when to make more coins, how many to produce or how much they should be worth.

Cryptocurrencies’ most defining features are built around their reliance on computers performing mathematical algorithms, or cryptographic functions, to verify and complete financial transactions.

The most important of these cryptographical functions is blockchain technology, which acts as a public record offering cryptocurrency unique, decentralised and secure public financial tender.

Another departure from fiat cash systems is the use of private and public keys to make transfers.

private and public keysprivate and public keysis a cryptographic system that uses pairs of keys: public keys, which may be disseminated widely, and private keys, which are known only to the owner. 

The combination of blockchains BlockchainsA decentralised Decentralised Decentralisation is the process of distributing and dispersing power away from a central authority. Cryptocurrency was first designed specifically as a means of achieving decentralised status, removing the need for third-party involvement from banks and financial institutions. and publicly viewable digital ledger of all connected transactions. and keys makes it possible for two parties to trade cryptocurrency without having to rely on trust or the need for banks to oversee the process.

The lack of a central authority is perhaps cryptocurrency’s most attractive feature.
Not only does the decentralised Decentralised Decentralisation is the process of distributing and dispersing power away from a central authority. Cryptocurrency was first designed specifically as a means of achieving decentralised status, removing the need for third-party involvement from banks and financial institutions. nature of cryptocurrency remove financial institutions from the process of transferring funds, it makes it more resistant to government regulation and interference.

Many had tried and failed to create a digital money structure to produce a financial system exempt from any centralised authority.
Bitcoin was the first successful attempt to develop a peer-to-peer electronic cash system, kicking off the cryptocurrency revolution back in 2008.

Many had tried and failed to create a digital money structure to produce a financial system exempt from any centralised authority. Bitcoin was the first successful attempt to develop such a peer-to-peer electronic cash system, kicking off the cryptocurrency revolution back in 2008.

FAQ

What is cryptocurrency? 
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Cryptocurrency is an internet-based currency digitally created to be used exclusively within the digital space. There are no physical coins with cryptocurrency, which is one of several advantages presented over traditional paper and coin money.

Do banks offer cryptocurrency services?
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The fast-paced nature of cryptocurrency’s growth means it is now more common than not for banks around the world to cater for cryptocurrency and offer services to users.

What is fiat currency?
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Legal tender, or regular money, whether cash or digital, is known as fiat currency. It relies on a central governing body to give it value.

How many cryptocurrencies are there?
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There are over 3000 types of cryptocurrencies in circulation, with more being programmed into existing almost by the day. Most cryptocurrencies function under the same core premises - they rely on blockchain technology and do not have anyone in charge.

How is cryptocurrency different to regular money?
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Cryptocurrency’s most defining feature is its blockchain technology. It allows it to be traded independent of an authoritative body to verify and complete financial transactions. 

When did cryptocurrency start?
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Many had tried and failed to create a digital money structure to produce a financial system exempt from any centralised authority. Bitcoin was the first successful attempt to develop such a peer-to-peer electronic cash system, kicking off the cryptocurrency revolution back in 2008.

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