What is a cryptocurrency?  Cryptocurrency is a ‘digital currency’ that uses advanced encryption technology to facilitate free & secure peer to peer transactions.

Most cryptocurrencies are fiat currencies by nature, meaning they have no backing by anything physical. Cryptocurrencies are also usually not controlled by any government or country. The value of a cryptocurrency is solely determined by supply and demand as it traders buy and sell the currency on the public traded exchanges and the actual value they are providing to the merchants, consumers, and overall marketplace.

What Is Cryptocurrency?  Here is a visual explanation showing how cryptocurrency is revolutionizing our world:

“Cryptocurrency gives you ultimate control over when and how you use your money!”

Cryptocurrency is the solution to the failing fiat currency system imposed by the United States Corporation & Federal Reserve:

Andreas Antonopoulos explains how cryptocurrency is the most revolutionary “disruptive” technology since the invention of the internet:

With the rise of the cryptocurrency industry, the banks are experiencing the “5 Stages of Grief” on the path to becoming obsolete:

“Cryptocurrency empowers the average person to become ‘your own bank!'”

So what makes cryptocurrency so different than the money you usually spend online via credit and debit cards? There are a few key differences to be aware of:

1. There is no central bank that determines it’s value or controls the flow of new money or ‘units of account’ being created.  So there is no manipulation of the amount of currency in circulation by a centralized institution like the US dollar is with the Federal Reserve.  The Federal Reserve controls the Dollar, but cryptocurrencies like Bitcoin are controlled only by their code to produce a limited amount of coins. No single person, company, or country can change this.
2. The value of a cryptocurrency is determined by the market (whatever people are willing to pay for it).  Countries are not involved, so the welfare of your nation’s economy will not affect the value of your cryptocurrency.  The value of a true cryptocurrency is based solely on supply and demand, similar to a commodity or assets trading on the stock market.
3. Cryptocurrencies have the lowest fees to transfer money anywhere in the world.  The fee is not affected by distance, country borders, or any other of the common factors.  This makes it very easy whether your objective is to transfer enormous sums of money globally or to conduct micro transactions with someone on the other side of the planet.

What Is A Cryptocurrency?: The Advantages

People love cryptocurrency because it offers an easy way to transfer money globally and provides privacy for making transactions.  For example, cryptocurrency can’t be traced like a credit card or a bank account can be to a specific transaction. At the same rate, all Bitcoin transactions can be forever traced to the specific ‘alias’ or wallet key that performed it.

There is much debate about whether Bitcoin is either untraceable or 100 percent traceable.  If it can’t be traced, it has an immediate appeal for the black market.

Even though the media often only reports on cryptocurrencies as something only used by criminals to buy drugs on websites like ‘Silk Roads,’ the truth is that most people who use cryptocurrency are just regular everyday people like you and me.

Heck, I just had to accept money in Bitcoin from a Pakistani fellow last week.  They don’t have access to Paypal!  Bitcoin was a convenient solution.

What is a cryptocurrency? People like to talk about cryptocurrency because it is making it possible to maintain some privacy in a world where someone is always looking over your shoulders, whether its the government, an Internet service provider or data mongering corporations.  While with currencies like Bitcoin, you enjoy a high level of anonymity, thanks to the fact that your identifying information is not stored in your wallet.

The only thing is the transactions can still be tracked in the blockchain, where you can see the money trail of transactions.  Cryptocurrencies such as Monero, DASH, ZCash, and Bitcoin Private offer the ability for you to transact completely 100% anonymously by implementing strategies that prevent people from following the money.

So while Bitcoin started it all, in the free market, there will always be competition that will learn from the mistakes of it’s competitors to serve the consumers better.  What you see with many altcoins is surely to bring innovation and a better-designed mousetrap to market. And as the market continues to evolve, we will continue to answer the question: What Is A Cryptocurrency?