what is cryptocurrency

Back-to-Basics

Among many other things, cryptocurrency is cryptographically-secure digital money that can also act as a smart and programmable, trusted 3rd party store and transfer-of-value. The adoption of cryptocurrency is rapidly growing around the world as more individuals begin to realize the benefits this form of value transfer has over traditional fiat currency. The genesis of cryptocurrency began with the Bitcoin blockchain back in 2009. Since then cryptocurrency has faced much criticism and has been the main driving force behind the many revolutionary breakthroughs the industry has witnessed. Below we outline the benefits and drawbacks of different types of value ownership; Cryptocurrency vs. Fiat (USD or other government issued notes).

Cryptocurrency vs. Fiat Trait Comparison Table

Traits of Currency Cryptocurrency Fiat (USD)
Fungible High High
Non-consumable High High
Portability High High
Durable High Moderate
Highly Divisible High Moderate
Secure High Moderate
Scarce (predicatable supply) High Low
Sovereign (government issued) Low High
Decentralized High Low
Smart (programmable) High Low

cryptis explain cryptocurrency

Money Demystified

Money is an abstract concept that exists to facilitate two primary functions – to act as store-of-value and transfer-of-value. The chemical makeup of traditional government printed notes is not what makes any one particular note “money”, rather, it’s the observer relative trust placed in the note that allows us to call it money. Today for the most part, this trust lies with centralized powers; think governments, banks, accountants, notaries and other powerful institutions and organizations that use money as their choice of value transfer. Humans used to transfer value with livestock, bags of heavy coins and land. Today we use credit cards, wire transfers and multisignature escrow services. Although seemingly more efficient, trusted third parties create a myriad of additional obstacles that counter free-trade, things like high fees, high levels of inaccessibility, among many others. Cryptocurrency seeks to solve these inefficiencies by sanctioning the trust in value in cryptographically secure math, rather than any one central power of control that is often times motivated by things like greed and mischief.

The State of Cryptocurrency Today

Today we have hundreds of different cryptocurrencies, also known as coins or tokens for short, with each coin seeking to provide or fill a fundamental utility, flaw, or void within the new decentralized economy. Many of these coins bring something unique and prudent to the table – being backed by a battle-hardened and sophisticated core team of developers, while others are nothing short of high-hopes and empty promises (learn how to identify good coins here). There is also a lot of newcomer hype and the unregulated Initial-Coin-Offering market is seeing a new coin almost every week. Below is a list of cryptocurrencies our team at Crypto Answers has thoroughly vetted:


bitcoin logo
Bitcoin


ethereum logo
Ethereum


litecoin logo
Litecoin


dashcoin logo
Dashcoin


steem coin logo
Steemit Coin

“Bitcoin is a technological tour de force.”

-Bill Gates, Co-Founder of Microsoft