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A Guide to Cryptocurrencies

Reid Kaikini

Cryptocurrencies are a decentralized secure form of online payment that are astronomically growing in popularity. Many investors consider Bitcoin to be the original cryptocurrency. Founded in 2009 by a programmer (or, possibly, a group of programmers) under the pseudonym Satoshi Nakamoto, Bitcoin ushered in a new age of blockchain technology and decentralized digital currencies.

Some of the most popular cryptocurrencies are Bitcoin, Ethereum, Litecoin, Cardano and Dogecoin. They operate as a transfer of digital assets similarly to physical notes assigned a worth. Cryptocurrencies are incredibly secure as there is a decentralized list or spreadsheet of secured transaction data which is shared by many host units. The spreadsheets combined form a ledger, due to a shared ledger system any fraudulent money laundering schemes will be detected by the system, as a result of identifying the amount of ledgers which share the same data.

Ledgers rely on processing power to record transactions, and to stimulate the minds of consumers, cryptocurrencies allow for something known as crypto mining. Crypto mining permits the sharing of processing power from a unit to keep copies of ledgers, there are 1 million crypto miners today hence attempting to hack the system and change ledgers, which will be next to impossible. Miners can be rewarded with a share of a cryptocurrency, which all fluctuates in value. Attempts at illegal transactions are 0.34% on cryptocurrencies while 5% of cash transactions. Currencies are pseudonymous, for example Bitcoin designates a public key or a unique identifier which assists security measures. The system for recording the transaction data is known as blockchain.

Cryptocurrencies seemingly prove to be more secure, efficient and effective in comparison to physical and traditional transaction methods. But there is a minor downside, which is why people are reluctant to utilize cryptocurrencies. Its volatility is due to the fact that it is in its nascent stage and since it is digital there is no concept of what worth should be assigned to currency. The value of the currency is determined by supply and demand. If demand increases faster than supply, the price goes up and vice versa. Currently China is the country with the most crypto miners as it controls 75% of the total network. Cryptocurrencies are a vast and intricate potential currency for the future, and their presence in the world is rapidly increasing. It seems that our society is only on the verge of a refined system of economics.

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