Everything You Thought You Needed to Know About Bitcoin (& More!)
If you've been wondering what crypto is and why it's become so popular, you're not alone.
This digital currency is completely decentralized and legal in all the major economies. Its decentralized nature also makes it 'pristine collateral' in the global economy.
Here are some facts you need to know about crypto. And don't forget to share this information with friends and family. Crypto is the digital currency that is currently the most popular and widely accepted around the world.
Bitcoin is a decentralized network of computers
Like Wikipedia, Bitcoin (https://en.wikipedia.org/wiki/Bitcoin) is maintained by a decentralized network of computers. This is the key to its success: the decentralization of the process makes it more financially advantageous for people to work together to create a network and maintain its currency than to attack it. Anyone with a computer can set up a mining operation and begin mining crypto, but only those with specialized hardware can win the race.
In comparison, other virtual currencies don't have this much support or are worth as much as crypto. After all, a currency is worth as many people accept it as it is accepted. In order for crypto to function, it must be maintained by thousands of computers. Since no central authority can collect this data, any computer with a crypto address can send and receive cryptos anonymously.
Bitcoin first came to prominence in 2011 when drug dealers started accepting payments in Bitcoin through sites like Silk Road. Although this site eventually shut down, several similar sites have popped up to replace it. Bitcoin has also become a popular method of ransom payments. Blockchain technology allows cryptocurrency to operate without a central authority.
By eliminating the central authority, cryptocurrency transactions can be processed more securely and efficiently without many processing and transaction fees. This allows for a more stable currency in unstable countries and a much broader network of institutions and applications. That makes it an ideal currency for the future, unlike cash or credit which will surely die away like the rest of modern society.
It is a digital currency
You may have heard of crypto. Crypto is a digital currency that enables you to conduct transactions independent of a bank's systems. Its popularity has led many people to purchase them as a financial investment, hoping that the price will rise.
Its decentralized network makes it difficult for governments to intervene. Unlike other currencies, crypto has no central bank and is issued by an issuer responsible for redeeming the digital currency for cash. A virtual currency is one that has its own units of value. The most popular digital currencies are crypto, Ether, and Litecoin.
It is legal in all major economies
Crypto is now widely accepted in the United States, where it is considered a digital asset and is legally accepted. However, the European Union has not yet passed clear legislation defining crypto as a currency. Nonetheless, the EU has clarified that converting conventional currency into crypto is exempt from VAT/GST.
While some financial observers hailed the move as a game-changer, others expressed concerns over the volatility of the digital currency. Experts have also warned that legalizing crypto in El Salvador could complicate the country's relationship with the International Monetary Fund.
It is a form of 'pristine collateral' for the global economy
In the legacy financial system, home purchases are conducted under a process known as fractional reserve banking, in which banks issue credit out of thin air against future earnings.
Traditionally, borrowers must repay the loan over twenty or thirty years at a fixed interest rate, called LIBOR, and in some cases pay a large down payment. However, if you buy bitcoin and it becomes more popular as a form of 'pristine collateral,' lenders are looking at it as the most pristine and secure form of money available to borrowers.
The technology behind crypto is making it a more dependable form of 'pristine collateral' for the international economy, and investors are looking at it as an alternative to conventional assets like gold and other fiat currencies. With its capped supply, built-in monetary policy, and powerful network effects, it could eventually replace gold as the 'pure' currency of the global economy.
