Crypto is the latest hot topic around and it’s been gaining a lot of interest recently. You’ve likely heard about it while browsing the web or talking to your colleagues. But what exactly is crypto and why is it gaining so much attention?
What is Crypto?
Crypto comes from the Greek word ‘kryptós’, meaning hidden or private. To understand what it is, you must understand the concept of blockchain and the basics of cryptography (crypto is short for cryptography, after all).
Blockchain is a secure digital data ledger. It’s purpose is to ensure that it’s data is publicly accessible to anyone, but no one can edit or tamper with it. Every time some information is updated, it is verified and sealed off by encryption, unable to be edited again. The next time this happens, the information is saved in a new “block” and the previous steps are repeated. This makes it possible for everyone to see the changes, but only the latest block can be edited and updated.
That’s the gist of it. The real process behind it is very technical and complicated. If you’d like to learn more about it, this article by How-To Geek does an amazing job of explaining the behind the scenes stuff in a blockchain.
There are a lot of uses of the blockchain technology, but cryptocurrency is the most popular one and it’ll be the focus of this article.
Cryptocurrency is basically digital money. It’s designed to be quicker and more reliable than our current “fiat” currency. Instead of having a central institution like a bank in charge of all the transactions, users send / receive money directly from other users on the blockchain. This prevents fraud and tampering as each transaction is recorded publicly on the “ledger” using the method described above. Since all transactions are available publicly to everyone and users don’t have to trust a central institution like a bank, this model is known as a “trustless” payment model.
History and future of cryptocurrencies
Bitcoin was the first ever cryptocurrency ever created. It was launched in 2009 and was made by an unknown person or group, only known by the name, Satoshi Nakamoto. Fun fact: this is why the smallest unit of Bitcoin is known as Satoshi or “Sat”.
Bitcoin relies on a process known as “mining”, through which users verify transactions on the blockchain. Since it requires a lot of computational power, miners are rewarded in Bitcoin.
These days many Bitcoin alternatives, known as altcoins have come up. Over a thousand altcoins have been created since 2009. While all of them are units of currency, they have different promises and features like faster transactions, improved privacy and much more.
But will it be the future?
A lot of crypto enthusiasts would confidently say yes, myself included. But it’s too early to tell if it’ll see mass adoption in the future. After all, even though it still has a lot of potential, it’s far too complex to be understood by an average person. And although the crypto community is making great advancements in terms of usability and accessibility, it’s just not there yet. Only time will tell if it’ll replace our traditional currency in the future.