An Overview of Cryptocurrency

Cryptocurrency is an innovative development in the world of commerce and exchange. It is a digital currency you can exchange for goods and services online. Enabled by blockchain technology, cryptocurrency owners can exchange the currency without a third party such as a bank. That particular feature, including a host of others, has led to an increase in the variety of cryptocurrencies and digital assets available today

While the numbers are still climbing, over 4,500 unique cryptocurrencies have been introduced to cyberspace and are being used by many. One reason the number of cryptocurrencies keeps surging is that the process of mining them can be relatively simple. With the source code of an already existing cryptocurrency, you can create another. For example, many of the newer cryptocurrencies are modeled after Bitcoin because it features an open-source code and a design structure that is practically resistant to censorship. The censorship-resistance feature of crypto ensures that no nation-state, corporate body, or third party can exert control over crypto transactions. Once a transaction is completed, it becomes immutable. The cryptocurrencies designed using Bitcoin’s source code are called altcoins.

Fundamentally, the two terms “token” and “coin” are common in the rapidly evolving crypto world and are sometimes used interchangeably. While the two words seem to describe the same thing, they are quite different.

A digital coin, like Bitcoin and Litecoin, depends on its exclusive blockchain technology. Blockchain is an online public ledger that assigns a unique identity, otherwise called a hash, to each transaction. Digital coins are very similar to the dollar. They are a valuable medium of commercial exchange.

Unlike digital coins, tokens are not merely another form of digital currency. For one, they do not have their exclusive blockchains. They rely on the blockchains of other cryptocurrencies like Ethereum. A token is very similar to a “deed.” It represents an individual’s ownership or claim over a particular asset.

Tokens have multiple purposes. They may have a specific function, allowing users to transfer files over a decentralized network like the Storj tokens. They may also be used as an adjoining component of a software program to primarily authenticate a user’s identification or monitor products as they move through a supply chain, among other purposes. Some of these tokens, like Ether, have reportedly been used in real estate and the art world to facilitate transactions. In contrast, others, namely NFTs (non-fungible tokens), certify and represent unique digital art.

According to a survey conducted by the Pew Research Center, of the bulk of Americans familiar with cryptocurrency, only 16 percent claim to have traded, used, or invested in the digital asset. More men, particularly from 18 to 29, have some form of knowledge and experience in cryptocurrency.

Cryptocurrency in the United States is typically owned by young Americans who are wealthy and tech-savvy. About 70 percent of crypto owners have an annual income that exceeds $1 million, and only 5 percent of the current cryptocurrency owners are above 55.

For many cryptocurrency holders, the digital asset helps diversify their investment portfolio. Although, 46 percent of American cryptocurrency owners use theirs for commercial transactions. In March 2021, PayPal started enabling shoppers across the United States, make purchases and complete virtual transactions from the many merchants enlisted on the PayPal platform. Banks have begun formulating systems that allow cryptocurrency transactions between their clients.

Collectively, cryptocurrencies are valued at over $3 trillion. Over 300 million people across the globe purportedly own crypto. Government leaders worldwide continue debating cryptocurrency regulation. China has recently banned the use of cryptocurrencies in commercial exchanges. In contrast, El Salvador has become the first country to legalize Bitcoin.