“Say What” … Cryptocurrency
Buddy, can you Spare a byte…
by Lance Navarro
Cryptocurrency, although interesting, can also be quite intimidating. The idea of creating digital money – “coins” – which can be converted to real money valued at more than us$1,000 each is definitely very exciting. However, the whole idea of making real money from simply running a program on your computer can seem quite fishy for many.
To make things a bit easier to understand, written below is some basic information about Cryptocurrency:
How does Cryptocurrency work?
Cryptocurrency uses coins which is a digital medium of exchange similar to the money we use to buy groceries and pay the bills. Each time something is bought through coins, the transaction is secured and posted to a public ledger. This ledger allows people to check how many coins were exchanged and to which accounts these went to.
How are Cryptocurrencies created?
In order to maintain this public ledger, a community of people called miners help process and secure all of these transactions. Miners are people with specially built computers designed to validate and process cryptocurrency transactions. In exchange for their efforts, coins are created and awarded in proportion to the amount of data they were able to process.
What’s the difference between real money and Cryptocurrency?
The value of money is regulated by the government. On the other hand, cryptocurrency is not regulated by any authority.
Most cryptocurrencies are also designed to decrease in production over time as it reaches a particular cap. This is very different from typical currencies as financial institutions can always decide to print more money, causing inflation.
Types of Cryptocurrencies
Ever since the introduction of Bitcoin – the original cryptocurrency – back in 2009, all sorts of new alternatives have appeared, each offering something different than the others.
Litecoin is designed to facilitate faster transactions. Quarkcoin claims to have a more secure system. Peercoin markets itself as the more sustainable cryptocurrency, claiming to use less energy and maintain a lower inflation rate than its competitors.
There are also other, more interesting variants such as Dogecoin, which takes inspiration from the popular Internet meme. Another strange example is Coinye, which only had a lifespan of 6 months until Kanye West demanded it be shut down.