If you understand what cryptozoology is, you may have an ill-advised idea about the definition of cryptocurrencies. Since they begin with the same 6-letter root, you may believe that cryptocurrencies are as imaginary as the animals studied by a cryptozoologist. A cryptozoologist is anyone who believes in the existence of animals often found in the folklore record, such as Bigfoot or the Loch Ness monster, which have been refuted to exist by the traditional scientific community.
While the person or persons who gave cryptocurrencies their start is clouded in secrecy and ambiguity, like the chupacabra of cryptozoology, cryptocurrencies themselves are very real. As a form of monetary value, they are digital rather than physical. They exist in the world of computers, so you can’t fold these virtual monies up and put them in your wallet or purse like you can cash.
Because you don’t carry a cryptocurrency around with you, it keeps you personally safer than when you whip out a wad full of bills to pay for your Christmas presents in a crowded shopping center. Security is why cryptocurrencies currently exist.
More Secure than Fort Knox
There is a United States Army post in Kentucky named Fort Knox. It is considered one of the most secure gold depositories in the world. You will hear people referring to something as “safer than Fort Knox,” meaning that the item in question is as secure as possible. Compared to the cryptography which secures cryptocurrencies from fraud and manipulation, removing gold from the veritable Fort Knox would be like taking candy from a baby.
In 2008 a gentleman (or group of people) named Satoshi Nakamoto announced the development of a virtual currency trading formula. Nakamoto called this creation Bitcoin. It used (and still uses) a complex and virtually unbreakable blockchain algorithm to make online transactions safer than they had been in the past. Instead of trusting a third-party to arbitrarily guarantee transactions between two parties, Bitcoin used a computer-driven verification method.
If you want to transfer 10 bitcoins to someone else, the process is verified through the use of multiple computers and a complex algorithm. This is much safer than third-party trust-based transaction processing where a centralized agency or business has all the power in telling you how much money you have in your account, or don’t have, and in denying or validating a transaction.
Finally launched in 2009, the Bitcoin open-source software became the first viable cryptocurrency.
It is now used just as traditional cash or credit and can be exchanged for a number of goods and services. In 2017, there are more than 1,000 global cryptocurrencies. The growing popularity in these unregulated, decentralized forms of money has caused many global financial regulatory bodies to begin investigations as to whether governments should begin to crack down on this trading platform which they cannot participate in or to begin accepting bitcoins and other cryptocurrencies as recognized forms of payment for a transaction.