Cryptocurrencies: Where Did They Come from and How Do They Work?

cryptocurrencies
Image Credit: membio on Yay Images

We’re hearing a lot about cryptocurrencies these days. Do you wonder if you should begin using them in your business?

Of course, before you do that, you want to know more about them. Well, you’re in the right place, then. That’s the purpose of this particular post.

 

RELATED ARTICLE: 5 BLOCKCHAIN APPS THAT WILL DRAMATICALLY TRANSFORM YOUR BUSINESS

 

How to Get Started

Everything related to cryptocurrency takes place through online channels. This is where users everywhere can buy and trade the Bitcoin and other cryptocurrencies. To get started, buy BTC online here. (BTC is the abbreviation for Bitcoin.) Expect to pay a transaction fee on each trade.

 

About Cryptocurrencies

Transactions conducted by way of cryptocurrency are safe and secure. What’s more, they’re easy to track. That’s because of the nature of the technology that lies behind them. This technology is called blockchain.

In a nutshell, blockchain technologies make it possible to conduct financial transactions person-to-person. In other words, there is no need for a middleman.

 

How Cryptocurrencies Emerged

Blockchain was invented in 2008 by an entity known as Satoshi Nakamoto. No one knows exactly who this person is. It’s even possible that it’s a group of people. Whoever they are, they prefer to remain anonymous.

By design, every keystroke of history related to a particular transaction remains in the blockchain record. Individual computers all around the world verify and then store this record, replicating it multiple times. This is what makes blockchain—and the cryptocurrencies that depend on it—secure. Blockchain technology is secure by design. Therefore, it prevents fraud and abuse.

Cryptocurrencies represent a departure from the norm. That is, no central authority issues them or regulates them. Instead, they rely on a decentralized system that records and manages transactions.

 

How to Access Them

Cryptocurrencies are available to anyone in the world who has access to the internet. In other words, anyone can use them.

For example, in Kenya nearly a third of the population now uses digital wallets. These wallets allow people access to microfinance services that are based on cryptocurrency. Until now, cryptocurrencies have not been regulated by the Kenyan government. However, Kenya’s government is now looking into the possibility of regulating these digital currencies.

 

How to Use Cryptocurrencies

In order to begin using any form of cryptocurrency, you’ll need a digital wallet. This is where you will store your cryptocurrency. Your wallet’s unique address will enable you to transfer funds into and out of your wallet.

However, you won’t need to reveal any personal details or other sensitive information when you conduct a financial transaction with your digital wallet. This aspect of cryptocurrencies makes them safer than credit cards. There is little danger of identity theft with cryptocurrency.

 

The Bottom Line

Cryptocurrency is still in its infancy. Much is sure to change in the months and years ahead. For example, governmental regulations are sure to come. On the other hand, businesses and individuals around the world are adopting the use of cryptocurrencies at a rapid pace. Large institutions may have difficulty keeping up with these fast-paced changes.

Should you adopt the use of cryptocurrencies for your business? The answer may lie with your customers. When large numbers of individuals choose to adopt cryptocurrency for their own use, your business may well have to follow suit.


Featured Opportunities

Related Stories