Crypto currency. You’ve definitely heard this term before. And even roughly imagine what it is.
Electronic money? Yes. But the Crypto currency can not be equated to money in Webmoney, Paypal or funds on cards. Currency? Yes. But the crypto currency is not regulated by the Central Banks of the countries, and its rate is not directly tied to the economy of any country.
Crypto currency is a special kind of financial and payment asset, designed to revolutionize the financial sphere. And someone is sure that the crypto currency is nothing more than another “bubble”.
In this Guide for Dummies we will get to know more closely with the crypt, we will try to determine its status, form and value.
What is a crypto currency
Crypto currency is a kind of digital money, which is based on the technology of cryptography, that is, data encryption. It has no physical appearance, but exists only in electronic form. Its main features are anonymity, decentralization and security.
What is a crypto currency: the characteristics
The circulation of crypto-currency inside the system is directly (P2P) – without the participation of a third party. Each of the participants is absolutely equal. No one has privileges, regardless of his social and financial status. At the heart of these virtual money lies the decentralized open database – the block.
Most crypto-currencies have an emission ceiling (release of new coins). So in Bitcoin it is 21 million “coins”. And in such currencies PPC and NVC there are no emission limits.
A bit of history
Why would anyone need to create a crypto currency? The answer to this question remains open. This is partly explained by the characteristics of the crypto currency. Earlier there was no convenient and fast way to carry out anonymous payments with a high level of security. With the advent of Bitcoin and the other crypts, this task was solved.
The official year of birth is the year 2009 when the Bitcoin network began to operate. The father of bitcoin and other cryptographic currencies is Satoshi Nakamoto, a mythologized character or even a group of people. Bitcoin was first published on this name. They / they also carried out the first transaction.
Personality of Satoshi
It is obvious that Satoshi Nakamoto and KO have realized many years of experience of specialists in the field of cryptography and IT-technologies. How many years the development and research were conducted is not known exactly.
But it is known that the very term cryptocurrency was first used in the Forbes story about Bitcoin in 2011. He was so fond of readers and fans of the new virtual currency, which soon began to characterize the entire niche.
Crypt VS Fiat
At the mention of the word “currency”, images of banknotes and banks float in the mind. We are used to the phiatic arrangement in financial systems. Fiat is a standard, adjustable currency. Like the dollar or the euro. The main differences between crypto currency and fiat currencies are as follows:
Crypto currency has no physical appearance. Yes, Fiat also exists in electronic form, but there are no banknotes or crypto-currency coins. Do not confuse physical coins, wallets and QR codes that are used to work with the crypt.
Crypto currency is not issued by the central bank and is not tied to the economy of any country. Issue and issue of crypto currency is not controlled by anyone. No one can limit these processes. Only the features of the system itself. The course is formed by a market path and is not directly related to the economy of any country.
She’s anonymous. To work with the bank, payment systems QIWI, WebMoney, Paypal it is necessary to specify at least some of the personal data. In crypto currency, this is not necessary. Each participant is anonymous. All information about him is a set of signs in the address of the wallet.
Direct transactions. There are no processing centers, intermediaries, issuers and third parties in this virtual currency system. There is a simple transfer of funds between the network participants directly.