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Explain like I’m five: What is Cryptocurrency?

The cryptocurrency market was valued at USD 1.03 billion by 2019 and is projected to reach USD 1.40 billion in 2024.

So, what exactly is cryptocurrency?

Cryptocurrency is a digital form of money. The mathematical field of cryptography is used to create the coins, which can then be used to buy goods and services.

Cryptocurrency is one of the fastest-growing types of currency in the new world economy. It has gained popularity globally, especially with the recent rapid growth of Bitcoin, and allows data to be made, stored, and transacted digitally, making it completely virtual and anonymous!

The main difference between cryptocurrency and bank credit is that instead of banks and governments issuing the currency and keeping ledgers, an algorithm does. With features such as decentralisation, end-to-end encryption, and peer-to-peer transactions, there is no wonder it has gained so much popularity.

Cryptocurrencies are now rapidly becoming more commonplace in the financial world. We have seen this even more so recently thanks to the huge rise in the price of Bitcoin, which went from US$226 in Jan 2015 to an all-time high of US$41,223 at the start of January 2021.

Cryptocurrency is appealing for a number of reasons:

1. Many see cryptocurrencies such as Bitcoin as the currency of the future and predict the value to go up over time

2. Cryptocurrency removes central banks from managing the money supply

3. The technology behind cryptocurrency, known as the blockchain, is a decentralised processing and recording system and can be more secure than traditional payment systems

One of the main benefits of cryptocurrency for many is that there is no central power controlling cryptocurrency, instead, an algorithm, and in many cases, users themselves control it. Unlike bank credit, cryptocurrency is decentralised and thus, not centrally controlled.

Most of the time, cryptocurrency can be obtained in the same ways other types of currencies can be. You can choose to exchange goods and services for crypto, you can trade dollars for crypto, or you can trade cryptocurrencies for other types of cryptocurrencies. This trading is usually done via brokers and exchanges.

How do you keep track of your crypto? The blockchain network on which all cryptocurrencies work carries a ledger, which keeps a count of the cryptocurrency generated and transferred.

It is important to note that cryptocurrency is an incredibly speculative and volatile buy. We recommend doing your own research (DYOR) before you commit to buying.

Some businesses and communities will create their own currency to use within their organisation. The currency or cryptocurrency is an internal currency in most cases. For some organisations the currency can become external and be bought and sold on an exchange. Piptle is creating its own currency to fractionalise and tokenise the income streams from yielding assets.

Find out more:

We are creating a new sideline decentralised finance economy! #DeFi #blockchaineducation✨ 🚀