That sounds complicated, right? Let's try to simplify things a little bit.
First, let's start with the terms. We like to call these "Blockchain Currencies", mostly because it sounds a little less scary and technical than "Cryptocurrencies". The term 'Blockchain' comes from the technology that most of these digital coins are based on - the Blockchain. We'll get into the details later - for this article, we want to focus on just the basics.
Think of a blockchain currency as ‘digital money’ – there is no physical money involved, so you can’t hold it in your hand like you can a dollar bill. Weird, right? But there are HUGE benefits to digital currencies. And all of the news that comes out every day about newer and greater advances in blockchain currencies is making it clear to many people that blockchain currencies are going to be a huge part of the future of money.
Now, there are many different blockchain currencies out there – think of it like it is in the physical world, where there are US Dollars, EU Euros, British pounds and many more physical currencies. In the digital world there are many digital currencies (like Bitcoin, Ethereum, Litecoin, and many more). Actually there are THOUSANDS of different types of blockchain currencies out there. As of the time of this writing, the two most popular are Bitcoin & Ethereum.
If you have millions of questions at this point, you're not alone! The world of blockchain currencies can look daunting, especially when you first start out learning about them. But keep reading, we continue on with some basics and later on we move into some more technical details. Also, we have guides throughout the site which will point you to other resources where you can learn even more.
Try to think of your blockchain currency journey like getting into a new hobby... if you collect things, or build things, or invest in things, you didn't learn how to do that overnight, right? What would be the fun in that!
WHY? - The simplest answer to why blockchain currencies matter is in their growing use and the crazy high number of reputable companies investing in the technology. Most people familiar with blockchain currencies seem to believe strongly that this is the way of the future, or at the very least, they will be around for a long time to come and will probably be used even more than they are today.
There are 3 big reasons that we have seen that people will acquire blockchain currencies:
WHERE? - Where the heck can you actually use these coins? It's not like you can just go online to one of your favorite sites and buy things with Bitcoins, right? Wrong! So not every major website accepts blockchain currencies right now, but a lot of them do. For example, Overstock.com accepts Bitcoin payments and are serious about the technology in general.
HOW? - How do you use most cryptocurrencies? The simple answer is through programs on your computer or on your mobile device. Most have digital ‘wallets’ available, which is a small program or device app that you can use to buy or exchange cryptocurrencies from your device. Also, there are plenty of blockchain currency exchanges out there that function like normal stock markets. You can buy & sell nearly any blockchain currency out there, and all of the prices are determined by what the markets are willing to pay.
Want to learn more? Check out Part 2 of our Intro Series to dive even deeper into the world of blockchain currencies.