Crypto 101, Part 1 of 9 : Understand Crypto, How it Empowers you and Transforms the Financial World.

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Welcome to Crypto 101 !

Most of the time when we hear about crypto, it is presented as a get-rich-quick scheme.

It's almost presented as a casino where you buy tokens with your money to bet against the house or other players. You lose some, you win some, and it looks exciting and risky.

However, what if I told you that the purpose of crypto is not this at all?

Crypto is a completely new concept, so we have to let go of our old perceptions.

First and foremost, there is a misconception that you need to buy crypto.

You don't need to buy it; the ones telling you this are the ones who want to sell something to you and it is most likely a scam.

If someone shows you a stack of dollar bills, is your first reaction is to ask , "Hey, where did you buy this money?" It just doesn't make any sense, right?

You would ask how they earned that money, what did they sold to get it, or what kind of business they operate to earn it.

Today, there are already individuals who live entirely outside the traditional financial system, relying solely on crypto for their financial needs—earning their income in crypto, buying and selling goods and services using crypto, and operating businesses that exclusively accept and utilize cryptocurrencies.

That's crazy right ? People tend to focus on the "crypto" part of cryptocurrency and not the "currency" part, which is the most important aspect.

It's a digital currency before anything else.

Remember when the internet first emerged and digital versions of everything were created? Digital pictures, text, videos, mail, and more. So why didn't digital money appear before?

Well, if you have a digital picture of your pet, computers make it easy to create a copy of it or even 10 million copies.

In fact, if you send a picture of your cat by email, both you and the recipient have a copy of that picture.

This is practical for cute cat pictures but presents a major problem when it comes to money.

Before the invention of crypto, the best way to address this issue was through a trusted third party like a bank, which would act as a bridge between buyers and sellers, employers and employees.

But what if we wanted to cut out the middleman?

What if we wanted to make sure that our hard-earned money is safe by ourselves and not depend on someone else to use OUR OWN money?

We would need a safe solution to verify and have others verify, not trust, that we really sent them money and not a copy of a picture of a cat !

We need proof that we are genuinely sending and receiving something of value.

That is the purpose of digital currencies.

But how?

That's where the "crypto" in cryptocurrency becomes essential.

Just like a dollar bill has a serial number, each coin has its unique serial number that serves as proof of authenticity.

But crypto coins are not physical, so you cannot read the serial number on them. How does that work? This is where blockchain technology becomes necessary.

The blockchain is a ledger.

A distributed ledger, meaning that there is many copy of it, in fact anyone can ask and withhold a copy of that ledger.

To better understand Blockchain, you need to first understand what a block is and why and how it is chained.

A block is a series of transactions.

Let's imagine there are only four people using the blockchain: Adrian, Benjamin, Cathy, and Diana (ABCD for short). A sends 2 coins to C, B sends 1 coin to A, D sends 3 coins to B, etc.

All of these transactions are recorded in a file, which is a block.

Now, each block has a storage space limit.

When that limit is reached, a new block is created to accommodate the next transactions.

At this point, we have an old block and a new block, and that's when the chain comes in.

When a new block is created, the first row contains a code that is a compressed version of all the data in the old block.

This is the "crypto" part, as in cryptography, the science of encoding.

The link between blocks, that is secured by a strong encryption is called a chain.

Voilà! You understand why its called a Blockchain now.

The chain ensures that every block of transactions is legitimate through a verification mechanism called consensus, a common agreement if you want.

I won't delve too much into this subject for now because blockchain technology will be the focus of our next article.

However, as you'll learn, it's an easy way for everyone to verify and trust that the transactions are legitimate, and the best part is that it's all done automatically.

Now that you've learned that crypto is simply the digital form of money, you'll be ready to understand why it is considered the most secure asset on the planet today.

In the next article, we'll dive deeper into blockchain technology and the mechanisms used to make it immutable, impervious to attacks, and why it can't be censored.

To summarize, cryptocurrency is not about betting and making money quickly.

It represents a fundamental shift in how we view and use money in the digital age.

By understanding the technology behind it and its intended purpose, we can better appreciate its potential and how it may revolutionize the financial world.

In our next article, we'll explore the inner workings of blockchain technology and reveal the reasons behind its unmatched security and reliability. Stay tuned!

If you have any questions or comments about this topic, please feel free to share them in the comments section below.

We'd love to hear your thoughts and engage in a conversation with our readers.

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