Crypto 101 – What is Crypto and how do I use It?
For a technology that has only been around for a little more than a decade, cryptocurrency (crypto) has made a big splash.
Like Superman and Lois Lane, cryptocurrencies and blockchain technology are inseparable. While every cryptocurrency you have heard of has a supporting blockchain, not every blockchain has a cryptocurrency attached to it. In fact, there are many popular commercial blockchain applications that aren’t connected to cryptos at all.
Cryptocurrency is a token that is recorded on a blockchain, much in the same way that a dollar is a unit of currency that can be recorded on a bank’s ledger. Unlike the existing Fiat currency system, cryptocurrency relies on “nodes” to facilitate transactions between two parties. The role of nodes is to maintain a copy of the blockchain and in some instances to process the transactions.
Despite the futuristic name, nodes are just computers running a program, from anywhere in the world. When cryptocurrency is transferred, the blockchain is updated (by a node, or group of them working together) with a fresh block, and the transfer of ownership is complete.
If this sounds simple enough, it is.
Cryptocurrency is made possible by New Technology
Blockchain architecture can vary and many blockchain types exist, but most of them allow crypto owners to freely trade their tokens with just about anyone. This means the world of digital asset trading has been opened up to a far wider audience than ever before, making it accessible to both savvy traders and market newbies willing to take a chance on an exciting new venture.
While it can be difficult to track down who owns some forms of cryptocurrency, and how they are being used, legitimate exchanges are taking the time to implement rigorous compliance principals such as “know your client” to reduce the risk of shady transactions and make unlikely any involvement in money laundering operations. Making secret payments for black-market goods is great for sexy spy movies, but in the real world, the reason why cryptocurrency really hit the big time is simple.
Human desire for a better life and greater social equality knows no bounds.
On January 1st, 2017, a single bitcoin would have set you back around $1,000 US dollars. By the end of the year, that same bitcoin was flying at over $15,000 US dollars, creating unprecedented public hype around cryptocurrency. For the first time, everyone was talking about Bitcoin.
While the sky-high peak didn’t last, Bitcoin has not disappeared and isn’t likely to anytime soon. Blockchain, the technology that Bitcoin and cryptocurrency is founded on, is opening the door to a whole array of real-world applications that can benefit from utilizing a decentralized network.
What to do with Crypto?
While cryptocurrency is a digital asset and isn’t tangible, it can be used to buy goods and services. In fact, there are almost 5 new crypto ATMs entering the marketplace globally every month. Most of those ATMs are in North America and Europe, however, there are many places in Australia that are also beginning to see the benefits to crypto and are adopting the technology and payment systems for their businesses.
Last year Agnes Water, a little coastal tourist town in Queensland, declared itself to be Australia’s first ‘digital currency town’, and at the time more than 30 business agreed to accept cryptos as payment. This town is showing Australia how it is done (and that it CAN be done) and could very well pave the way for many more towns and businesses to follow suit.
For those of you who are interested in trading cryptocurrency, Lex Exchange is here to help. It doesn’t matter if you’re a seasoned crypto king or a total newbie who wants to dip your toe in the water, our easy to use platform makes buying and selling crypto a straightforward process with just a few clicks.
Head to our website and register for a free account to check it out. https://account.lex.exchange/signup