If you ever played Monopoly and later wondered if it’s possible to create a new kind of currency (or money), we have the answer for you: yes! Sure, different countries use different currencies like dollars in the United States and pounds in England, but recently, a new form of currency has showed up and it’s called cryptocurrency.
Cryptocurrency is a new form of currency. Bitcoin, one of the first cryptocurrencies, was developed by a person (or persons!) named Satoshi Nakamoto. Notice how we said, person or persons? No one knows exactly who’s behind the name Satoshi Nakamoto because it’s a fake name. It’s similar to how some authors use a pen name (or a fake name) to author their books. While some may consider Nakamoto the father of cryptocurrency, he didn’t actually invent the currency, rather the idea of digital money that could be used around the world.
But before we get into why cryptocurrency is gaining popularity, let’s break down the word “cryptocurrency” first. First—currency. We all know that currency is a form of money. You use it to pay for something. Cryptography is the art of solving codes and encryption is the process of converting information into code and only those who have the encryption key (or those who are authorized) can decode it. Got all that?
So why all this buzz about cryptocurrency? Well, cryptocurrency depends on encryption to send money from one person to another in a digital form. In other words, there’s no exchange of anything physical when it comes to cryptocurrency — no coins, no paper bills. Furthermore, no banks are involved. Since cryptocurrency is transferred digitally, there’s no need for a bank to help transfer money from the United States to another country like Thailand for example. You can, therefore, also pay someone without expecting that person (or yourself) to have a bank account! Fascinating, right?
Also, similar to how there are different types of currencies, there are also different types of cryptocurrencies. Bitcoin is one, and earlier this summer, Facebook announced a cryptocurrency called Libra. Why? According to the company, 1.7 billion people around the world don’t have bank accounts and are unable to pay for things online. Cryptocurrency would change that for a lot of people.
Do you think cryptocurrency is a good idea?