{"id":334319,"date":"2021-09-03T15:00:09","date_gmt":"2021-09-03T12:00:09","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/what-is-cryptocurrency\/"},"modified":"2021-09-03T15:00:09","modified_gmt":"2021-09-03T12:00:09","slug":"what-is-cryptocurrency","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/what-is-cryptocurrency\/","title":{"rendered":"#What Is Cryptocurrency?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a29e8cfc001f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a29e8cfc001f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-cryptocurrency\/#Cryptocurrency_vs_Regular_Currency\" >Cryptocurrency vs. Regular Currency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-cryptocurrency\/#The_Cryptocurrency_Blockchain\" >The Cryptocurrency Blockchain<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-cryptocurrency\/#Putting_the_Crypto_in_Cryptocurrency\" >Putting the Crypto in Cryptocurrency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-cryptocurrency\/#Buying_and_Mining_Cryptocurrencies\" >Buying and Mining Cryptocurrencies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-cryptocurrency\/#Storing_and_Spending_Bitcoin\" >Storing and Spending Bitcoin<\/a><\/li><\/ul><\/nav><\/div>\n<p><strong>&#8220;#What Is Cryptocurrency?&#8221;<\/strong><\/p>\n<div>\n<figure style=\"width: 1200px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"type:primaryImage wp-image-749248 size-full\" srcset=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2021\/08\/shutterstock_1434643079.jpg?width=398&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1 400w, https:\/\/www.howtogeek.com\/wp-content\/uploads\/2021\/08\/shutterstock_1434643079.jpg?width=1198&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1 1200w\" sizes=\"auto, 400w, 1200w\" alt=\"Physical coins representing the Bitcoin, Ethereum, Litecoin, zcash, and ripple cryptocurrencies.\" width=\"1200\" height=\"675\" src=\"https:\/\/www.shutterstock.com\/image-photo\/crypto-currency-background-various-shiny-silver-1434643079\" data-credittext=\"eamesBot\/Shutterstock.com\"\/><figcaption class=\"wp-caption-text\"><span class=\"type:primaryImage imagecredit\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.shutterstock.com\/image-photo\/crypto-currency-background-various-shiny-silver-1434643079\">eamesBot\/Shutterstock.com<\/a><\/span><\/figcaption><\/figure>\n<p>Chances are you\u2019ve heard of cryptocurrency: Bitcoin, Ethereum and Dogecoin have all become words we hear on the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> or read online. But what is cryptocurrency exactly, and how does it work?<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Cryptocurrency_vs_Regular_Currency\"><\/span>Cryptocurrency vs. Regular Currency<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Right now, you hopefully have some money in your pocket in the form of dollars, euros, or rupees, depending on what your country gives out as currency. This money is given value by a delicate system operated in part by governments, as well as certain market mechanisms that are too involved to get into here.\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/www.thebalance.com\/value-of-money-3306108\">This article from <em>The Balance<\/em><\/a> serves as a solid primer, though.<\/p>\n<p>Cryptocurrency is different from this, and radically. Instead of having a physical presence\u2014the notes and coins in your pocket\u2014it exists entirely digitally, without the power of a government to back it. Rather, it relies on free-market mechanisms to determine its value: what people are willing to pay for it determines what it\u2019s worth.<\/p>\n<p>Of course, without a central issuing authority inflation could become a real issue: anybody could just claim at any time that they have a thousand or a million cryptobucks, and there\u2019s nothing anybody could do to stop them. If you create your own U.S. dollars, you\u2019ll get arrested for counterfeiting.\u00a0If you create cryptocurrency out of thin air, nothing will h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>en.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"The_Cryptocurrency_Blockchain\"><\/span>The Cryptocurrency Blockchain<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This problem was one of the biggest issues surrounding cryptocurrencies until <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.businessinsider.com\/bitcoin-history-cryptocurrency-satoshi-nakamoto-2017-12#in-2008-the-first-inklings-of-bitcoin-began-to-circulate-the-web-1\">Satoshi Nakamoto<\/a>\u2014likely a pseudonym for a person or group, nobody knows for sure except Satoshi\u2014came up with the blockchain. It\u2019s a pretty complicated piece of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>, but it boils down to being an online ledger that anybody can view, but not everybody can edit.<\/p>\n<p>Much like the ledger that an old-school accountant would keep (that book Ebenezer Scrooge is hunched over is a ledger, for example), the blockchain records how many there are of any given cryptocurrency and who owns and spends them. It does so in so-called blocks, hence the name \u201cblockchain.\u201d Below is one example of a ledger in action.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-748407\" src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2021\/08\/blockchain-example.png?trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"An example of a Bitcoin ledger\" width=\"1000\" height=\"402\"\/><\/p>\n<p>The ledger keeps track of how much of any given cryptocurrency is spent (Bitcoin in the above example), when it\u2019s spent, and also who spent it. Though your identity is protected by a pseudonym\u2014random numbers and letters called a hash\u2014when using most cryptocurrencies, none except for a few exceptions are truly anonymous. Even\u00a0Bitcoin isn\u2019t \u201canonymous\u201d in the way many people think it is.<\/p>\n<p><strong>RELATED:<\/strong> <strong><em>How Anonymous Is Bitcoin?<\/em><\/strong><\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Putting_the_Crypto_in_Cryptocurrency\"><\/span>Putting the Crypto in Cryptocurrency<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The ledger is only one side of the equation. While it\u2019s very nice to have a record of the cryptocoins going in or out, ledgers can be easily tampered with. In the old days, you\u2019d use an eraser or some white-out to make expenses disappear, now you can do much the same with some advanced tools.<\/p>\n<p>One way to guard against these issues is the openness of blockchain technology: if everybody can see what\u2019s going on at any time, it should be easy to quickly figure out if something hinky is going on. The other way is to harness the power of cryptography, or encoding the data of entries and then decoding them as needed.<\/p>\n<p>In the case of cryptocurrencies, this is usually done by using passwords to make sure a user is who they say they are, or rather that their wallet\u2014where cryptocurrencies are stored\u2014is the one that belongs to them. Since the username of a wallet is usually hashed, as we saw before, it\u2019s important to make sure that users remember their passwords.<\/p>\n<p>There are <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nytimes.com\/2021\/01\/12\/technology\/bitcoin-passwords-wallets-fortunes.html\">several examples<\/a> of people forgetting their passwords and locking themselves out of their cryptofortune.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Buying_and_Mining_Cryptocurrencies\"><\/span>Buying and Mining Cryptocurrencies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With the theory of cryptocurrencies out of the way, let\u2019s take a look at how they work in practice. To get started with cryptocurrencies, you\u2019re going to have to go to an exchange like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Fwww.coinbase.com%2F\">Coinbase<\/a> or <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.kraken.com\/\">Kraken<\/a> to buy your cryptocurrency of choice using regular money. We have a guide on how to buy Bitcoin if you\u2019d like to know more; the guide also applies to other cryptocurrencies.<\/p>\n<p>There are other ways to get your hand on most cryptocurrencies, namely through what\u2019s called mining. This isn\u2019t anything like swinging a pickaxe, though: instead, a computer is verifying whether new blocks of existing cryptocurrencies are real or fake. Payment for this service is then in that same currency. It\u2019s the only way to release new units of a cryptocurrency and thus the best way to get more of it.<\/p>\n<p>However, considering the insane amount of computing power that\u2019s needed to process the data necessary for verifying the new blocks, there\u2019s a chance your custom-built gaming rig will have smoke billowing out of it before you mine even the equivalent of a few bucks. There\u2019s so much processing power needed, in fact, that mining is no longer the field of enthusiasts, but rather of whole companies. Even <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/article\/mexico-bitcoin-insight-idUSKBN28I1KD\">criminal gangs<\/a> are getting in on the action\u2014and making millions.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Storing_and_Spending_Bitcoin\"><\/span>Storing and Spending Bitcoin<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Assuming you just bought your cryptocurrency of choice, you still need a place to store it: unlike cash money, Bitcoin and Ethereum can\u2019t be sewn into your mattress. For this, you\u2019ll need a wallet. These come in software and hardware form and can store your particular blockchain information for you.<\/p>\n<p>A software wallet is often offered by exchanges\u2014though you can subscribe to a seperate one, the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/bitcoin.org\/en\/choose-your-wallet\">Bitcoin site<\/a> has a selection\u2014and is simply an online service where Bitcoin can be stored. Many of them have good security, though they have been <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.digitalshadows.com\/blog-and-research\/cryptocurrency-attacks-to-be-aware-of-2021\/\">falling prey to hackers<\/a> more and more often.<\/p>\n<p>The alternative is a hardware wallet, which is pretty much just a special USB stick that keeps track of the blockchain for you. Examples include <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/trezor.io\/\">Trezor<\/a> and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Fwww.ledger.com%2F\">Ledger<\/a>. They\u2019re pretty nifty, though again, if you lose or forget your password your crypto is gone.<\/p>\n<figure style=\"width: 773px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-748406\" src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2021\/08\/ledger-wallet.png?trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"Ledger wallet\" width=\"773\" height=\"500\"\/><figcaption class=\"wp-caption-text\"><span class=\"imagecredit\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Fshop.ledger.com%2Fproducts%2Fledger-nano-s\">Ledger<\/a><\/span><\/figcaption><\/figure>\n<p>Once you\u2019ve settled on a wallet, then all you really need to do is decide what to spend it on. Many online services will let you pay in cryptocurrency, and doing so is pretty easy: just click the right buttons and you should be okay. Alternatively, you could just let it sit in your wallet and watch as the price of it goes higher and higher (or plummets completely).<\/p>\n<\/div>\n<p><script>\n setTimeout(function(){\n  !function(f,b,e,v,n,t,s)\n  {if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n  n.callMethod.apply(n,arguments):n.queue.push(arguments)};\n  if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n  n.queue=[];t=b.createElement(e);t.async=!0;\n  t.src=v;s=b.getElementsByTagName(e)[0];\n  s.parentNode.insertBefore(t,s) } (window, document,'script',\n  'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n   fbq('init', '335401813750447');\n   fbq('track', 'PageView');\n  },3000);\n<\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/technology\/\" target=\"_blank\" rel=\"noopener\">Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/www.howtogeek.com\/748405\/what-is-cryptocurrency\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#What Is Cryptocurrency?&#8221; eamesBot\/Shutterstock.com Chances are you\u2019ve heard of cryptocurrency: Bitcoin, Ethereum and Dogecoin have all become words we hear on the news or read online. But what is cryptocurrency exactly, and how does it work? Cryptocurrency vs. Regular Currency Right now, you hopefully have some money in your pocket in the form of dollars,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":334320,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2021\/08\/shutterstock_1434643079.jpg?height=200p&trim=2,2,2,2","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-334319","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/334319","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=334319"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/334319\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/334320"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=334319"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=334319"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=334319"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}