In the last post we looked at what blockchain is and how it´s defined. Often when people think about blockchain they think about cryptocurrency. What is cryptocurrency? Bitcoin is probably the first cryptocurrency and the one that most people have heard about.
Below is a graph from Google Trends showing the amount of searches, as you can see it peaked around the launch and is now starting to pick up again.
So let´s dive into trying to learn what cryptocurrency is.
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spendhttps://www.investopedia.com/terms/c/cryptocurrency.asp
Investopedia describes it as a secure digital currency that is nearly impossible to fake or counterfeit, very similar to the definition of blockchain. Cryptocurrency is built on blockchain technology.
Cryptocurrency is decentralized
What does it mean that a cryptocurrency is decentralized? A centralized currency is very often also a national currency for example the U.S. Dollar ($). It´s governed by the government of the US and they are able to decide what actions to take (like for example to print more money). When it comes to decentralized currency it is not governed by one body but is distributed.
To summarize what cryptocurrency is:
- A digital currency
- Often decentralized (there are some expectations)
- Hard to fake or counterfeit