What is Cryptocurrency?

By Danny Xia2 min read · Posted Sep 28, 2022

19
Views

Cryptocurrency

Cryptocurrency, also called coins or altcoins, is an encrypted, decentralized, digital currency that is built around blockchain technology.

Technology

Due to its digital nature, one crucial aspect of understanding cryptocurrency is technology - specifically, blockchain technology. A blockchain is a record of transactions of the cryptocurrency. This is usually compared to a ledger. Let’s say I gave my friend an amount of bitcoin. This transaction would be stored in the blockchain. The intricate part of the blockchain is security. In order to provide verification to the blockchain transactions, computers compete to solve mathematical equations that are then used to add to the blockchain. As a reward for providing security, as a large amount of computing software would be needed to fake a transaction, the computers are awarded cryptocurrency as payment. This awarding has created the crypto miner industry.

Different Coins

The most popular cryptocurrencies are Bitcoin and Ethereum. However, there are thousands of different types of cryptocurrencies. You, yourself, can set up a cryptocurrency! With all of these different types of cryptocurrencies, in combination with the digital aspect of cryptocurrency, meme coins, such as Doge coin or SHIBA INU, have gained notable traction.

Investment

Before choosing to invest in cryptocurrencies, it is important to understand the risks, implications, and processes involved. Firstly, cryptocurrencies are very volatile, since cryptocurrencies are a very speculative market and can change in price to reflect public opinion. Secondly, due to its decentralized and digital nature, security can be an issue. Since cryptocurrency is relatively new and decentralized, governments have not fully regulated it. Theft or crimes towards your crypto wallet (software that stores cryptocurrency and your identity) may not be punished or can be hard to track. Despite these potential risks, cryptocurrencies can still be a worthwhile investment. Some investors consider cryptocurrencies to be the currency of the future, being online and not tangible. Other investors might be drawn in because the coin is decentralized and not tied to the government or banks. Other investors may simply be interested in cryptocurrency's ability to increase tremendously in price, such as bitcoin's 1000% growth in the past five years. Other buyers of cryptocurrencies might just be using it for secure online transactions, instead of investing

References

About The Author

Danny Xia

1
Articles
20
Total Views
0
Total Likes
0
Total Shares

See more posts by Danny Xia

Comments

Your generosity fuels innovation and drives success!

Our resources are assembled by a team of entrepreneurs who donate their time and energy to Pitch Labs to ensure that entrepreneurial resources are available to everyone. Unfortunately, we can't avoid major expenses such as website hosting fees. To ensure our resources remain free to access and use, we rely on donors who are able and willing to give back. Consider donating to be a part of the Pitch Labs mission today!

More in Financial


Financial » Funding

What is bootstrapping? How can I make it work for me?

by Janae Castillo ·May 23, 2025

39
Views

What bootstrapping is, its pros and cons, and how to deal with its challenges. Read more

Financial » Accounting

What is a payroll?

by Warren Patterson ·May 21, 2025

53
Views

In this article, you’ll learn what a payroll is, what’s included in a payroll, and why a payroll is important for your business. Read more

Financial » Accounting

What is the Accounting Equation? Why Does it Matter to Business Owners?

by Tonya Parker ·May 16, 2025

68
Views

What do entrepreneurs need to know about the accounting equation? Get the details of this foundational accounting principle and why it's important. Read more

Financial » Income

Fair Work Wages for Women: How to Take Your Potential and Turn It into Dollar Signs

by Shanice Peters ·May 16, 2025

44
Views

This article is about wages and earning potential for men and women in the workforce. The role demographics play in which racial groups are ranked over the other. Read more

Recent articles


Operations » Product & Service Management

When developing a product/service, what should be taken into account?

by Tonya Parker ·May 28, 2025

41
Views

It’s not just market size that matters. What should entrepreneurs keep in mind when choosing the product or service they’ll offer? Find out in this article. Read more

Operations » Human Resources

What is the nominal group technique?

by Warren Patterson ·May 26, 2025

31
Views

This article is about the nominal group technique, a structured approach to group creativity and decision making. By reading it, you’ll understand what it is, when it should be used, and the steps for effective implementation. Read more

Basics » Business Plans

How Do I Create a Basic Business Budget?

by Warren Patterson ·May 19, 2025

77
Views

Ready to take control of your business finances and shape your future? Discover tools, tips, and strategies to build a budget that drives success. Read more

Operations » Product & Service Management

What Are Product Distribution Channels?

by Callie Leff ·May 14, 2025

67
Views

This article explains the three different types of product distribution channels as well as the varying levels of complexity and different roles within product distribution channels. Read more

Join Our Community


Looking for something else? Get your questions answered in our free online learning community!

Entrepreneurial Resources


Jumpstart your next business with our free resource library.

Disclaimer


Our organization cannot give out official legal/fiscal guidance. All articles are written by volunteers and it may be beneficial to contact professionals to assist your understanding of the information and to guide your action. Pitch Labs bears no responsibility for the results of actions taken based off of article content or any other form of assistance given.