Blockchain Technology

Introduction to Cryptocurrency

“Cryptocurrency is the next evolution of money.”
– Diversified Internet Holdings CEO Ryan Nelson

We know that in ancient days, commodities essential to daily living were considered money (e.g. cows and chickens) and traded among micro-economies. Then the modernization of society and urban cities brought the need to track money and value across large territories of land, which resulted in the birth of paper and coin money issued from the ruling governments.

Fast forward to a quarter of a century ago, and an invention called the world wide web made it possible for people to buy and sell virtually anything to anyone around the world. Because you sending paper-cash and coins is a burdensome process, the preferred method for these transactions was bank-issued credit cards.

Present times have gifted us with another advancement, which is a new form of money that is native to the internet – cryptocurrency. Below we explore what this new type of money is, how it works, and how you can get involved

Cryptocurrency Definition

Cryptocurrency noun

A cryptocurrency (also called a crypto-coin, crypto-asset, crypto money, or token) is an internet-based medium of exchange that uses cryptography to secure the digital exchange of financial transactions, control the creation of new units, and verify the transfer of it.

Cryptocurrencies are considered to be decentralized and digital, where the transfer between users is peer-to-peer (P2P) and confirmed via a process commonly called mining. They are fungible to be used on everyday goods and services, just like government issued currencies, such as Dollars, Euros, Rupees, or Renminbis.

cryptocurrency
token

Token Definition

What is the definition of a Cryptocurrency Token?

token is a type of cryptocurrency that represents a utility, asset, or both and is issued on top of an existing blockchain, without a currency use case. Cryptocurrency tokens act as a secondary asset for a particular application in a blockchain ecosystem. Tokens have market value, but are not considered to be a straightforward currency such as Bitcoin or Litecoin.

Similar to a blockchain being a type of distributed ledger, tokens are a type of cryptocurrency. Much legal scrutiny has been exerted for lawmakers to define if a cryptocurrency is a token or a security. This is important because financial securities require extensive regulatory compliance, whereas a token would be considered a non-security asset and not be subject to the same compliance requirements.