Cryptocurrency – have you heard?
If you’ve been following the news lately, it’s quite likely that you’ve heard the word “bitcoin” or “cryptocurrency” pop up. But what are cryptocurrencies? Where did it come from, what does it do, and why should you care? Let’s learn about some of the basics of cryptocurrency!
Where did it come from? Who made it?
The first cryptocurrency, bitcoin, was created in 2009 by a person or group named Satoshi Nakamoto. No one knows who Satoshi is, and whether it’s a pseudonym of a single person or a group. Satoshi said:
“Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority.” – Satoshi Nakamoto, 09 January 2009, announcing Bitcoin
What makes cryptocurrency so special?
The idea behind cryptocurrency is that there is not a single entity which controls it. Think about the money you have, for example. Who controls its supply? The answer is the central bank. The central bank in Canada is called… the Bank of Canada. They are the ones who can control the supply of Canadian dollars. Cryptocurrency is special because there is no central bank for it. In other words, it is decentralized.
What’s the benefit of being decentralized?
Those who believe in the value of cryptocurrency say that because the money is not controlled by one entity, it becomes more secure. Rather than hacking into one centralized computer system, people would need to hack millions of computers. With this sort of infrastructure, it is essentially impossible to become a victim of malicious hackers.
How do I use it?
People can buy cryptocurrencies by going through online exchanges. Think of them like online stock exchanges. After you buy your chosen cryptocurrency, you can now transfer it to other people. It’s a simple process where they give you their wallet “address”, and you go into your own wallet and send the money to their “address”.
Obviously, cryptocurrencies are a lot more involved and complicated than this, but the above points give the general gist. In the future we will be delving further into the world of cryptocurrency, so please continue to check back with us, and keep up-to-date!