What is cryptocurrency? Learn about its history, how it works, and how to get started with Bitcoin and other digital currencies.
Cryptocurrency is a form of digital money that typically uses ledger-based technologies such as blockchain technology to help facilitate secure and decentralized transactions. While the concept of cryptocurrencies has existed for decades, Bitcoin popularized the decentralized, blockchain-based form of digital currency known today as cryptocurrency.
History of cryptocurrency
Throughout the 1980s and 1990s, several attempts were made to create a viable form of digital money. These precursors to cryptocurrency were largely unsuccessful experiments, until in 2008, an anonymous person or group under the pseudonym Satoshi Nakamoto published a whitepaper titled "Bitcoin: A Peer-to-Peer Electronic Cash System.”
The paper outlined a revolutionary concept for a decentralized digital currency that used cryptography to ensure security and transparency. Bitcoin introduced several groundbreaking technologies and concepts that would later become synonymous with cryptocurrency, including blockchain technology.
Since then, thousands of cryptocurrencies have been created, each with different use cases and features. While it can be difficult to provide a single definition that applies to all cryptocurrencies, there are some key features that most cryptocurrencies share.
Key features of cryptocurrency
- Decentralization: Unlike traditional banking systems, which rely on centralized authorities like banks or governments, cryptocurrencies operate on decentralized networks. This means no single entity controls the currency, making transactions more transparent and resistant to censorship.
- Blockchain Technology: Cryptocurrencies typically rely on ledger-based technologies such as blockchain technology, a distributed ledger that records all transactions across a network of computers. This technology ensures transparency, security, and immutability of transactions.
- Security: Cryptocurrencies use cryptographic techniques to secure transactions and control the creation of new units. This makes it difficult for bad actors to manipulate the system or counterfeit coins.
How to get started
Anyone with a computing device and internet connection can access the world of cryptocurrency. There are many ways to get started, from setting up a self-custody, or self-managed, crypto wallet on your smartphone or computer to signing up for an account on a cryptocurrency exchange or brokerage firm.
One of the most popular ways to get started is to create an account with a crypto exchange like Binance.US. Crypto exchanges offer prospective users an easy way to purchase and store Bitcoin and other cryptocurrencies.
When selecting a cryptocurrency exchange, these factors are usually considered:
- Cryptocurrency selection: The range of cryptocurrencies supported by the exchange.
- Available features: Consider the features you’ll need, such as access to different trading order types like limit orders, stop limit orders, and others — or, perhaps you’ll want to grow your crypto by participating in staking.
- Pricing & fees: The trading fees, withdrawal fees, and deposit fees between different exchanges.
- Security and trustworthiness: The exchange's security measures, historical conduct, and reputation.
If you are ready to get started, consider creating a Binance.US account to securely buy, sell, and trade Bitcoin while accessing 150+ cryptocurrencies.
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