What is Cryptocurrency
Updated: Jul 27, 2019
Electronic commodities/assets have been on the rise in the past few years. You may have heard of Bitcoin and wondered what it was. Here are the basics of what you need to know about cryptocurrency.
Cryptocurrency is a digital commodity. When you think about cash money, you can think about it being backed by bars of gold in a bank somewhere. The gold backs the cash and gives it value. Digital currency or cryptocurrency, is not backed by a physical element; it is electronic.
Cryptocurrency is a form of digital commodity. When you think about money, you might think about currency issued and guaranteed value by a government. It might be backed by a commodity like gold, silver, or oil. The government or commodity backing the currency gives it value. Digital coins/tokens are not backed by a government or any physical element; it is purely electronic. However each business should offer a smarter solution with their blockchain projects coins/tokens.
Released in 2009, Bitcoin was the first cryptocurrency. It is similar to gold in the sense that there is a limited quantity of 21 million coins. Bitcoin has an advantage over gold. Because it is digital, it is easier to divide, transfer, and store. And unlike physical money it cannot be counterfeited. Blockchain security concerns have been on the rise with the growth of cryptographic transactions. However we at Cethereum have our own solution that we will read more about it. We can now transact easily and securely with Cethereum services.
Why use digital coins/tokens?
You might be wondering, what are the advantages of using cryptocurrency? Digital contracts have several advantages. In order to talk about the advantages, we first have to go over some of the technology that makes digital money possible.
Blockchain technology is basically a series of transactions that are unique and secure. It allows for transactions between parties to happen without having to go through a third-party, like a bank.
You can think of blockchain transactions using building blocks. Every person has a unique block and every transaction has a unique marker. This makes the transactions more secure and harder to hack, forge, or alter.
Blockchain technology has gained credibility and use because the technology can be applied to other areas outside of cryptocurrency. It has many applications including scientific research, open data and file sharing, and transparent tracking of digital assets.
What can you do with digital coins/tokens?
You can use digital money the same way that you use physical money. You can buy goods or services with it, donate to a good cause, and trade it. In order to make a purchase with cryptocurrency, you have to first purchase the coins or tokens from a recognized exchange the same way you would get money from a bank. Then you need to find a merchant that accepts the currency. The same way some stores accept credit cards, while others do not or how Euros are only accepted in certain countries.
Who manages crypto/digital transactions?
A network of computers running certain code called “nodes” running certain code to keep up with the blockchain. Other currencies are government issued.
How does it get value?
Coins/tokens primarily get their value from supply and demand, while other currency value has to do with the confidence in the government that issued it.
How is it secured?
Digital currency is administered by computers and software that use strong cryptography to secure transactions, hence the term “Cryptocurrency” and the blockchain technology behind it. Banks and other financial institutions secure other currencies.
Are there physical coins or bills?
Can I buy things with cryptocurrency?
Yes, wherever it is accepted.
What makes Cethereum special? We promote decentralization and equal open source platform for everyone. Ether is a commodity not a fiat currency. We are a technology company solely providing services and not investment plans/advice. Cethereum focuses only on the Ethereum contract. At Cethereum, we are more transparent with what we do. For some other coins/tokens, it is not really obvious what the companies behind them are doing and what their business is all about. In our case, we focus on production (mining) and selling (exchange) and providing excellent services to our clients. We have the whole supply chain management. We conduct the transactions for you and transactions can be always verified.