As we begin the new year, rising inflation, a topic that dominated the latter half of 2021, is, predictably, on many people’s minds. People are looking for the best way to increase their earnings while keeping up with rising inflation as the effects of the pandemic linger. Cryptocurrency is one of the many noticeable investment options that people are flocking to in order to capitalize on rising inflation.
As cryptocurrency continues to gain traction around the world, many Jamaicans are still unaware of what it is and the plethora of opportunities that come with it. The goal of today’s blog is to provide a better understanding of what cryptocurrency is, the most popular cryptocurrency, and how you can own your very own cryptocurrency. So, without further ado, let’s get started.
What is Cryptocurrency?
Cryptocurrency is the perfect antidote to banks and their ever-increasing bank rates and fees. To clarify, cryptocurrency is a digital currency that does not rely on banks to store, commit, or verify transactions. Cryptocurrency is kept on the blockchain, which is a distributed ledger that is stored on every computer that is connected to the blockchain. It is safeguarded by cryptography, a technology that makes counterfeiting or double-spending nearly impossible. Cryptocurrencies exist independently of governments and central authorities due to their decentralized structure.
You do not own anything concrete if you have cryptocurrencies. What you have is a key that enables you to transfer a record or a unit of measurement from one person to another without the involvement of a trusted third party. Consider the case of Bitcoin. Each coin is essentially a computer file saved in a digital “wallet” that can be accessed via smartphone apps or internet-connected devices. These files can be transferred (in whole or in part) from one person to another using blockchain technology. Cryptocurrencies are either mined or bought on cryptocurrency exchanges.
What is the blockchain?
There have previously been numerous attempts to create a place to store digital currency, and the blockchain is essentially the culmination of those numerous attempts. The issue with storing digital currency was that it had to be stored on a database, which the database owner could change to give themselves X amount of money or steal X amount of money from others. To address this issue, the blockchain was designed as a one-of-a-kind system that is owned and managed by the people who use it, rather than by a single person or company.
The blockchain is a type of Distributed Ledger Technology (DLT)—a decentralized database managed by multiple participants—in which transactions are recorded with an immutable cryptographic signature known as a hash. The blockchain is essentially a digital ledger of transactions that is replicated and distributed across an entire network of computer systems connected to the blockchain. The blockchain contains several transactions, and whenever a new transaction occurs, a record of that transaction is added to the ledgers of all blockchain participants.
Because every transaction must be verified by every computer on the network before it can be confirmed, forging transaction histories is nearly impossible. The digital ledger’s contents MUST also be agreed upon by the entire network of computers that keeps a copy of the ledger. As a result, for it to be true, each duplicated ledger on each computer on the block MUST reflect the exact same thing. This prevents a transaction on the ledger from being faked or hacked, and it also prevents double-spending, so people who store money on the blockchain can be confident that it will be safe.
Types of Cryptocurrencies?
Bitcoin was the first cryptocurrency and remains the most well-known and valued today. Thousands of cryptocurrencies are currently accessible; these are a few of the most well-known:
- Polkadot (DOT)
- Binance Coin
Investing in cryptocurrencies and other initial coin offerings (“ICOs”) is extremely dangerous and speculative, and Sheforges makes no advice to invest in cryptocurrencies or other ICOs in this article. Because each person’s circumstance is different, you should always get advice from a knowledgeable specialist before making any financial decisions. Sheforges offers no warranties or representations about the accuracy or timeliness of the material provided here.