2021 has been a record year for cryptocurrency. More than 100 million adults globally own some form of cryptocurrency. Bitcoin and Ethereum have hit record highs, and new coins are launching what seems like weekly. With all of the buzz around the crypto space, it can be hard to find out how it all started. In this blog, we are breaking down the basics of cryptocurrency and the technology the powers it.
Cryptocurrency is a digital currency that can be used to buy goods and services online using the distributed and decentralized blockchain system.
Major cryptocurrencies include:
Bitcoin – the first cryptocurrency, founded in 2009 by the anonymous creator, Satoshi Nakamoto. It is a purely electronic form of money that unlike paper money has a finite supply. There will only ever be 21 million bitcoins in existence, which is why many cryptocurrency experts believe bitcoin is the solution to inflation. Bitcoin hit an all-time high of $63,000 per coin earlier this year.
Ethereum – a community-run technology powering the cryptocurrency ether (ETH) and thousands of decentralized applications. Currently, ETH has hit an all-time high of almost $4200.
Litecoin – a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. It is an open-source, global payment network that is fully decentralized.
Dogecoin – a cryptocurrency that was created as a meme and popularized by Elon Musk. SpaceX has recently announced a ride-share mission to the Moon completely funded by Dogecoin, making it the first space mission funded by a cryptocurrency.
Cryptocurrencies, like Bitcoin, exist because of the technology that powers them, Blockchain.
Blockchain is a decentralized, public ledger that allows for something to exist in only one place. Unlike current banking payments, cryptocurrencies use the blockchain, so money only ever exists in one place. With bank transfers and payments, banks take 1-3 days to process, and for a brief amount of time the money exists in two places. With blockchain technology, money can only exist in one place at any given time, and transfers and payments occur in minutes.
Instead of waiting a week for an international payment/transfer, blockchain can facilitate the payment in under an hour, no matter the amount.