What is cryptocurrency this is a common common question and it can be a really confusing thing so let’s just break it down in a nice simple way to help it all make sense to you.
What is cryptocurrency? It’s much more confusing than it needs to be because the industry has grown over the many many years since Bitcoin first came around. The words which have been applied to it have been quite careless. And unfortunately, now we have almost 20,000 plus different types of tokens in the space which all have kind of inherited the word cryptocurrencies even though logic would dictate that it must be some type of currency a payment coin in order to inherit that name and that’s not true.
What is cryptocurrency or what is Bitcoin? Bitcoin, of course, is a payment, it is a currency, and therefore, is a cryptocurrency, but the rest of the coins that followed after it Ethereum, Solana, Ada, and Xrp many of these are coins that perform different functions that are not strictly currencies.
So ultimately the best way to think about them is kind of like a crypto asset or a crypto share or a crypto token of those 20,000 different types of coins that exist today at the time of writing this. Only a small handful are technically trying to be currencies. Many of the other coins can be used for digital asset transfer, supply chain logistics, medical records, insurance protocols, asset transfers of houses and properties and cars and vehicles loads of different things.
What is cryptocurrency? So don’t think for a second that a cryptocurrency is necessarily a form of payment coin. It’s actually many many many things that all sit on the blockchain.
One of the cool ways to kind of summarize this is if you imagine the Internet as a cool underlying technology. On top of that sits Amazon, eBay, Microsoft, and Facebook totally different businesses performing totally different business services but they all use the Internet as a base technology to operate their business.
How does Blockchain Works?
Similarly, that’s the way that blockchain works blockchain sits at the bottom as the technology. On top of that sit many many different types of cryptocurrencies or crypto tokens or shares which are basically just different tokenized systems of many different types of commercial businesses using that baseline technology for lots of different reasons.
Why blockchain technology is so exciting?
So it’s actually much more interesting than people think and this is why blockchain technology is so exciting because it’s much more than just a digital form of payment. That was where it started and the technologies subsequently developed very rapidly.
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Again that’s one of the reasons why everyone is interested in the machines I mean mining equipment that technology provides because ultimately these are blockchain servers and they can provide power to many of these different types of companies not necessarily just cryptocurrencies and not just a case of earning cash you’re able to learn different types of tokens that have a commercial value as well.
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So it’s much more exciting than people realize forget the word cryptocurrencies. Think of them in terms of crypto assets or crypto tokens. Maybe even like a crypto share similar to how you’d understand the share market today and that would really help clarify things for you a little bit.