Introduction to Cryptocurrency: eSwatini Times Sunday Edition

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What is cryptocurrency? It has more than one answer and is confusing to a lot of folks who didn’t grow up with the internet in their hands. Also called crypto which is short for cryptography which is? the art of writing or solving codes. It is not the name of a single coin, project, or organization but an overall term for the different forms of digital representations of money.?

Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service.

Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security because it uses decentralization in order to democratize the decisions and future as it goes forward.

It is important to understand some specific terms because this often causes confusion for most people.

Decentralization - the transfer of authority and responsibility for public functions from the central government to subordinate or quasi-independent government organizations and/or the private sector—is a complex multifaceted concept.

Money - Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.

Currency - A currency in the most specific sense is money in any form when in use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money (monetary units) in common use, especially for people in a nation.

Fiat Money - The physical cash you pay at the store is a currency established as money, often by government bodies and backed by reserves such as the Emilangi, Rand, Euro, and U.S. dollar. Fiat money does not have intrinsic value and does not have use value. It has value only because a government maintains its value, or because parties engaging in exchange agree on its value.

Cryptocurrency - is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions.

Ledger - A cryptocurrency public ledger is a record-keeping system. The ledger maintains participants' identities anonymously (as wallet “account” numbers), their respective cryptocurrency balances, and a record of all the genuine transactions executed between participants using that coin. Imagine a bank where every sale or exchange is available to view by anyone. This ledger creates a public record that the majority of participants agree upon and which provides complete transparency to anyone wishing to view.

Wallet - A cryptocurrency wallet is a device, physical medium, program or a service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often also offers the functionality of encrypting and/or signing information.

Private Keys - A private key is a sophisticated form of cryptography that allows a user to access their cryptocurrency. A private key is an integral aspect of cryptocurrency, and its security makeup helps to protect a user from theft and unauthorized access to funds.Your crypto private key is a randomly generated string (numbers and letters), allowing bitcoins to be spent. A private key is always mathematically related to the bitcoin wallet address, but is impossible to reverse engineer thanks to a strong encryption code base. This is what secures the network from scammers, thieves, and hackers.Each private key creates a unique signature that authorizes the transaction of bitcoin for the owner. It's called a private key because it is meant to be kept private and not shown to other people

Passphrase - The passphrase is essentially? your 24-word recovery phrase that provides access to a whole new set of accounts. The passphrase protects your crypto assets if your 24-word recovery phrase were to be compromised. Each different passphrase unlocks a unique set of accounts.

Recovery Phrase - The recovery Phrase is a list of 12 or 24 words that represent the single secret piece of data that is used to generate both the public and private key of your account. This is your backup if you lose your wallet. It's as important as the wallet itself because it allows access to your funds in case you lose your wallet.

Currently much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices skyward through pump and dump schemes or outright scamming people through platforms that are not connected directly to the company or organization of the coin.

The most popular cryptocurrency, Bitcoin, has had volatile price moves this year, reaching nearly $65,000 in April before losing nearly half its value in May. In recent weeks, the price of bitcoin was back in the $40,000 to 50,000 USD range .