Beginners Guide: What You Should Know About Cryptocurrency

What is “cryptocurrency” and what problems are solved by CryptoCurrencies?

Basically it is digital money, called ‘tokens’ similar to what you have at the car wash. You exchange cash for a ‘token’ that only works in the car wash.  Imagine that online?  You can make tokens for everthing!  But the main thing is to prevent people from copying or stealing your tokens.  Cryptocurrency.org states “The aim of CryptoCurrency is to store and transfer values without the need for the services of a third party (like a bank). Previously, we were only able to send money if it was validated by a money-institute or a company that dealt with financial transactions – like PayPal. We needed them to solve the problem of “double spending”, i.e. making records of the amount of money someone has on their account and guaranteeing that you can’t spend more than you actually have.

Bitcoin was born

In 2008, Satoshi Nakamoto, whose identity is still unknown today, invented Bitcoin. Satoshi might have been one person, or a whole group – one thing is certain though: in 2008 they published the description of Bitcoin, effectively solving the above mentioned problem of double spending.

The problem with digital currencies is that just like a computer file, they can be copied. Just as someone makes a copy of a digital photo and publishes them to any of the social media sites, you could do the same with digital currencies if there is no central agency that oversees digital money. As we already know, however, these agencies are untrustworthy, expensive and slow. The technology behind Bitcoin, called blockchain helps solve these issues.

By solving these accountancy issues, Bitcoin and all the other CryptoCurrencies were good to go and people could send money to each other directly all over the world, no matter where they were and without having to worry about being conned by someone. Blockchain allows you to stay anonymous, however, all transactions have been and will be recorded so you can find out easily if a certain transaction as really gone through. The system is much faster than a bank transaction as well, and it is not tied to working hours or days.

 

The first altcoins are introduced

Following Bitcoin, a number of other CryptoCurrencies have emerged. These can be different in how they work, e.g. can not be considered money per se, but fulfill other functions. A common feature is that they do not need a third party as an intermediary. For example, if you wanted to email someone, you would need to use a service like Gmail. The blockchain behind CryptoCurrencies can make Gmail obsolete as well. If you needed a ride, you would call a taxi-company or an Uber – with blockchain and smart contracts these companies will one day be a thing of the past.

CryptoCurrencies are different from traditional money in many respects. For one thing, they are global, i.e. you can use them anywhere. There is no Bitcoin Dollar or Bitcoin Euro, there is just Bitcoin. CryptoCurrencies have no physical form, there are no bills or coins we could put in our pockets – they exist in digital form only, and we can use them with our smartphone or computer. This might seem like a novelty, but the 90% of the world’s current money in circulation exists only on the banks’ servers as 1s and 0s. From a certain point, CryptoCurrency is the natural evolution of money – it is faster, cheaper and more efficient than its predecessor.”

“Cryptocurrency is basically digital money.

Is GetSmart a Cryptocurrency?

GetSmart has a token, and you can trade it with other tokens, but it is not a “currency” like Bitcoin or Ethereum.  If you want to trade your tokens for US dollars or another “fiat” currency, then you will first have to trade GetSmart tokens for a currency that can be traded with US dollars or other currencies.  But who else is going to give you money to GET SMART?

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