A cryptocurrency is a form of money. Think of it as a new, electronic "cash-of-the-future".

Or, think of it as a sort of "PayPal 2.0". Same basic concept; deposit money, send money, receive money, withdraw money; with one big difference. There is no centralized computer holding your electronic money; YOU control it without any outside influence or control.

Cryptography

Traditional forms of money are printed on cloth paper, using special tricks and hidden features for security measures. Cryptocurrencies are their own security measures in the way they are built. Each crypto has its own algorithm (computer program) that automates the creation, storage and transfer of money; including recording those transfers onto that crypto's "blockchain" (a public ledger that broadcasts every transaction ever made with that crypto). Every user has a constantly updated copy of the blockchain; making the entire system completely safe from fraud and hackers. So, instead of being printed by a central authority, cryptos are created by the programming built into each one as the various "miners" (computers that clear pending transfers) create new coins.

What makes it different?

Cryptocurrencies are designed to make electronic payments; much like online banking, credit cards and payment platforms. However, the decentralized nature (meaning, no one is in control of your money except you) of cryptocurrencies removes external influences, fees and the possibility of fraud as every crypto user is part of the entire system. So, rather than being held and controlled by a bank or website, cryptocurrency is controlled only by the user, while being tracked and monitored by the entire network of users.

While conventional cash (called "fiat") is given a value in relation to silver, gold and /or the amount of debt held by the government backing it; cryptocurrency is given a value strictly according to supply and demand as dictated by the users. So, the difference is clear.

Thousands of years ago a man somewhere picked up a seashell or a handful of salt and traded it to his neighbor for a fish, or one of those stone wheels we see the caveman carving in cartoons. Since that time seashells and salt have become Dollars, Pesos, Rubles, and Euros. The governments decided long ago to take control of those fiat forms of cash.

Cryptos are a gift born of the desire for freedom from that traditional centralized system; giving the entire world the opportunity the first time in 10,000 years to control their own money. It is a true revelation of financial freedom created within the beauty, complexity, security, and transparency of the codes and blockchains that make each crypto unique.

Danny Donahue