Digital Technology 101 A Layman’s Take on Cryptocurrency

Within the past several years we have been hearing more and more about cryptocurrency, but unfortunately, a significant portion of the population isn’t quite sure exactly what that means. We know that it is a type of digital currency that has value, and it can be converted into fiat currencies from literally every country, but that’s as far as most of us understand. Without getting overly technical, let’s try for an allegorical layman’s take on the subject.

Why Cryptocurrencies?

The reason why cryptocurrencies like Bitcoin have become so popular is because they aren’t tied to any central bank. Nothing is printed or minted but rather they are a set of digital computations that are actually spread over a series of computers all around the globe. No one computer holds all the information for a specific currency owned by a specific person or company, and these computers are networked so that they work together. Cryptocurrencies can be converted into fiat currencies as mentioned above. The easiest way to convert crypto to fiat would be to use a cryptocurrency converter like the ones compared on okx.com. That’s a very basic definition, but there is an easier way for a lay person to understand the concept.

Let’s Play Treasure Hunt

Do you remember going on a treasure hunt as a kid? No one knew where the treasure was but there were clues scattered around so that finally someone would find the actual treasure. That’s a bit like the way in which cryptocurrencies work. As a series of digital files, they will need to be accessed in chronological order so that the very last file completes the transaction. That’s the treasure. However, unless you gather all the mini files leading up to the ‘prize,’ you won’t complete the master file that is, in the end, your crypto of value.

Following Hidden Clues

Think of all those files being kept on independent computers in a global network. Those can be likened to the clues you are searching for in a treasure hunt. Unless you gather all of them, the treasure won’t be complete. However, because they are a series of files leading up to the final computation, they are extremely secure. Cryptocurrencies are rarely hacked and said to be the safest monetary transactions available. Unlike using a debit card that goes through a payment platform to your bank, cryptocurrency needs to be accessed in countless computers before the file is complete, forming a digital currency. Even the most proficient hackers are unable to crack the network of files.

Although the concept of cryptocurrencies is much more complex than that, you will at least have a very basic understanding of how the technology works. In short, no one computer contains the entire cryptocurrency file, making the blockchain technology of crypto extremely secure. Perhaps you’d rather think of a cryptocurrency as a dollar separated into pennies, each hidden in a different, highly encrypted location. Once again, it’s a very basic definition of what crypto is all about, but it’s a starting point to help you better understand why they have become so popular.