Cryptocurrency has been the most intriguing development attached to blockchain technology. Nevertheless most introductions to cryptocurrency do not outline what it is and how it came into being.
If you have been following this series from the basics of blockchain technology to the history of blockchain and smart contracts, you will know that it is all about teaching in the simplest way.
This blog post will not be an exemption. So you will know how cryptocurrency came into existence but before then let’s define cryptocurrency.
What is cryptocurrency?
A cryptocurrency is a digital or virtual currency which uses cryptographic encryption.
The currency that we all know such as Nigerian naira is being printed by a Nigerian security printing and minting Company Limited.
After printing, the Central Bank of Nigeria then issued the currency.
Recently CBN announced the redesigning of the Naira note.
Aside from the central authority that back fiat, it can be duplicated even though it might not look real. There have been instances of fake Naira notes.
Against all of this, cryptocurrency cannot be seen because they are based on cryptographic encryption.
Cryptographic encryption makes cryptocurrency almost impossible to be duplicated.
Wikipedia defined cryptocurrency which can also be referred to as crypto-currency or crypto, as a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority such as a government or bank to uphold or maintain it
It could be noted that cryptocurrencies are developed to work as money, that is as a medium of exchange.
In addition to being used as a medium of exchange, it solved the problem of geographical location.
Fiat’s are only acceptable within a geographic location while cryptocurrencies are accepted globally.
1 bitcoin is 1 bitcoin across the globe but Nigerian naira is only acceptable within the geographical boundary of Nigeria.
Brief history of cryptocurrencies
Cryptocurrency was first referred to as cyber-currency but that dated back to the 1980s.
The creation of a truly decentralized cryptocurrency started in the 1990s but it was first mentioned in 1989.
In 1998 the term cryptocurrency was coined by Wei Dai in an attempt to develop a new decentralized payment method that uses cryptographic systems.
B-money and Bit Gold are two examples of cryptocurrencies that are formulated but never fully developed.
Due to this reason, bitcoin maintained the first cryptocurrency to be launched since then there’s been varieties of cryptocurrencies.
About Kumo
Kumo, registered as Kumo Technologies Inc in Delaware, U.S. is a fiat and crypto social payment app which allows users to exchange fiat (NGN) to crypto, save and earn interest in dollar with as low as $5, utility payment such as DSTV subscription, airtime, data among others.
Kumo wallet is your all-in-one social payment app for seamless payment solutions.
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