Explaining Cryptocurrency to a 5 year old may be the best way to learn about it.
You’ve probably heard enough about Cryptocurrency. It’s said to have made a lot of people rich. Even 50 cent who already had a lot of money.
But the way cryptocurrency works is known to very few people.
In this post, we try to explain what it is and share some basic terms you may want to know about
Cryptocurrencies or cryptos sometimes called virtual currencies, digital money or tokens are not really like the Ghanaian cedi or US dollar.
They live online and are not backed by the government but by their respective networks,
When people think of Cryptocurrencies, most automatically think of bitcoin (since it’s the most popular and most widely accepted) and black market frauds whereas just a few understand how it works
Although there are technically over 1000 cryptos, only a handful are relevant and have market caps of over a million dollars which include bitcoin, Litecoin and Ethereum among others
Now that’s the simple definition. Let’s move to some basic terms known in the crypto universe.
Websites where you can buy and sell crypto-currencies. Some popular exchanges in Ghana are Payplux and Remitano
Government-issued currency, such as the US dollar
Someone that owns absurd amounts of crypto-currency
Generally any crypto-currency other than Bitcoin or Ethereum
Taking advantage of a difference in price of the same commodity on two different exchanges
Pump And Dump
The recurring cycle of an altcoin getting a ton of attention, leading to a fast price increase, and then of course followed by a huge crash
The total value held in a crypto-currency. It is calculated by multiplying the total supply of coins by the current price of an individual unit
Storage for crypto-currency that exists purely as software files on a computer
Now that you know just a little enough, you can impress your friends when you hang out.