If you feel like cryptocurrency is an entity only suitable for those with the strongest technological knowledge, you are partially off-base. There is no doubting that the actual process by which the digital coins are created and then passed along from one party to another is something that requires great technological expertise to understand. But the process of one individual either using these coins or investing in them is actually quite simple when you get right down to it.
Derrick Alling is the CEO of Atriark Inc., a company that mines coins for those who procure their services, and he believes that terminology is part of the stumbling block for those who aren’t quite up on it. “People here all these terms that are foreign to them and they get intimidated,” he says. “It’s almost like people are speaking in another language. But once you break that all down for people, they see how simple it is and how beneficial having access to digital coins is for themselves or their business.” With that in mind, here are some of the terms most commonly used defined in as simple a manner as possible.
This is the overarching term for any form of the digital coin that allows one party to conduct a transaction with another party without the use of any paper money or the assistance of a third party like a bank or credit card company. Cryptocurrency is known as a peer-to-peer system, which means equal parties send and receive money to each other with high levels of transparency, privacy, speed, and affordability.
Bitcoin is the most popular form of cryptocurrency and owns the biggest market share. Many people actually conflate the terms Bitcoin and cryptocurrency and think that they’re one and the same. But there are many types of cryptocurrency available, many of which have an advantage for new investors in that they are much more affordable to acquire.
This is the name of the technology that is at the foundation of cryptocurrency. When any kind of transaction is made using cryptocurrency, a digital ledger containing all elements of this transaction is formed. Each aspect of the transaction is a block on the chain, which can be witnessed by those who are involved and can’t be eradicated.
This is the term used to described how new coins are created. A group of people known as miners, who can come from any place in the world, compete to solve a mathematical problem, and the one that does first have the opportunity to mine a new coin, just as someone would mine gold or silver. In this way, the amount of coins is kept at a finite level so that the coins retain proper value.
These are just some of the basic concepts behind cryptocurrency. Once you have a firm grasp on them, it will seem like a very easy process to buy and sell the coins and use them for whatever purpose you might require.