Purpose

Why was cryptocurrency invented?

The purpose of this new type of currency is debated, as no one knows who first produced the first successful example of functioning cryptocurrency. Many believe its initial design and programmed functions mean its initial purpose was to secure the exchange of goods in the digital sphere.

While the internet has come a long way over the past 30 years making online purchases easier and less risky than ever before, hacking of financial resources and personal information remains commonplace.

Centralised databases held by a few powerful organisations have traditionally overseen making all transactions safe and valid, but the rate of innovation is making it difficult for lone organisations to keep up with changes.

This is where cryptocurrencies come in, providing a unique method for securing digital information. 

Cryptocurrency’s blockchain Blockchain Growing list of records, called blocks, that are linked using cryptography. technology provides a decentralised public distribution and validation alternative to the traditional big-bank scheme making digital hacks next to impossible.

When did cryptocurrency begin?

Satoshi Nakamoto is credited as being the first successful creator of functioning cryptocurrency. Nakamoto released Bitcoin to end third-party requirements to make digital money transfers, and the attached costs and restrictions incurred by these banks and financial institutions. No one knows who Nakamoto is, the name only references the person or people who developed Bitcoin.

This Bitcoin programmers, or programmers, discovered the answer to the problem plaguing digital currency developers for decades, finding a way to verify fund transfers between two parties without having to involve a bank to oversee the process.

This problem developers failed to solve before Bitcoin, known as the Double-Spend Problem Double-Spend ProblemThe ease of which users could theoretically counterfeit digital currency and the issue holding back the arrival of cryptocurrency for decades., was the ease in which someone could counterfeit digital currency.

Without a centralised authority overseeing transactions, users could essentially copy and paste computer files, duplicating currency. Banks act as the authority on fiat financial transactions, making sure these types of problems don’t happen, and charging their clientele fees for the service. 

Basics: Purpose

How does cryptocurrency work?

The invention and use of blockchains is what made cryptocurrency possible. A blockchain is a digital record of transactions multiplied thousands of times across a vast network.

It is a complex system designed to be next to impossible to alter and watertight in its security, functioning independently from any sort of central authority.

Cryptocurrency’s decentralised DecentralisedDecentralisation 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. characteristics are also strengthened by making all accounts and transactions public.
This system is called the distributed ledger technology (DLT). While names and ownership details are kept private, all account balances are visible to all users, so when cryptocurrency is sent and received, anyone can easily witness indiscretions and prevent wrongdoing.

Secure decentralised DecentralisedDecentralisation 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. digital tender may have been a clear goal in mind when Nakamoto and his predecessors attempted to program the first usable cryptocurrency, but it is unclear what cryptocurrency’s purpose will be going forward.

Secure decentralised DecentralisedDecentralisation 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. digital tender may have been a clear goal in mind when Nakamoto and his predecessors attempted to program the first usable cryptocurrency, but it is unclear what cryptocurrency’s purpose will be going forward.

While cryptocurrency still largely functions in the way Nakamoto first envisaged, this financial concept is fast expanding and evolving as it grows more and more popular.
Today, there are thousands of different cryptocurrencies designed for its original use to buy and sell products, but also to send and receive information, represent other forms of worth, access programs and more.

Distributed ledger technologyDistributed ledger technologyGrowing list of records, called blocks, that are linked using cryptography.

The potential of cryptocurrency and its blockchain networks are only beginning to be understood. 

FAQ

Why was cryptocurrency invented?
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The purpose of this new type of currency is debated, as no one knows who first produced the first successful example of functioning cryptocurrency. Many believe cryptocurrency’s initial design and programmed functions mean its purpose was to provide a trustless system capable of providing secure exchanging of goods in the digital sphere.

How is cryptocurrency more secure than regular currency?
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Cryptocurrency’s blockchain technology provides a decentralised public distribution and validation alternative to the traditional big-bank scheme making digital hacks next to impossible.

Who invented cryptocurrency? 
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Satoshi Nakamoto is credited as being the first successful creator of functioning cryptocurrency. Nakamoto released Bitcoin to end third-party requirements to make digital money transfers, and the attached costs and restrictions incurred by these banks and financial institutions. No one knows who Nakamoto is, the name only references the person or people who developed Bitcoin.

What is the double spend problem?
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This problem developers failed to solve before Bitcoin, known as the Double-Spend Problem, was the ease in which someone could counterfeit digital currency. 

What is a blockchain? 
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The invention and use of blockchains is what made cryptocurrency possible. A blockchain is a digital record of transactions multiplied thousands of times across a vast network. It is a complex system designed to be next to impossible to alter and watertight in its security, functioning independently from any sort of central authority.

Next step: Popularity

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