加密货币 - 这是什么？

Cryptocurrency - definition

Cryptocurrency is a type of digital currency that uses cryptography for security and anti-counterfeit purposes. Public and private keys are often used to transfer cryptocurrency between individuals. Cryptocurrency is essentially a fiat currency, meaning that users must reach a consensus (agreement) on the value of the cryptocurrency and use it as a medium of exchange. They are not linked to a specific country, therefore their value is not controlled by central banks. In the case of bitcoin, the leading example of a cryptocurrency, value depends on market supply and demand, meaning it behaves similarly to precious metals such as silver and gold - hence the large fluctuations in cryptocurrency prices. Decentralized control of each cryptocurrency operates through distributed ledger technology, usually blockchain, which serves as a database for public financial transactions.

The first cryptocurrency - Bitcoin

Bitcoin was created in 2008 and it was not a random date. Also in 2008, Occupy Wall Street accused major banks of misusing borrowers' money, defrauding customers, rigging the system, and charging staggering fees. Bitcoin pioneers wanted to put the responsibility on the seller, eliminate the middleman, cancel interest fees, and make transactions transparent to eliminate corruption and lower fees. They have created a decentralized system where you can control your funds and know what is going on with them. Why is it like that? Because in the case of cryptocurrencies, you do not hold your funds with any intermediary, only you have access to your wallet, no one else has power over your funds.

Properties of cryptocurrencies

1. Irreversible: Once a transaction is confirmed, it cannot be undone. "Can't" literally means you can't. You, your bank, Satoshi Nakamoto, not even the president can do it. There is no administration, company or organization you can call or write an e-mail to help you recover your funds.
2. Anonymity: Neither transactions nor accounts are tied to real identities. For example, you receive Bitcoins on so-called addresses, which are random-looking collections of about 30 characters. Although you can see its content and transactions by the address, it is almost impossible to trace it to an individual.
3. Fast and global: The transaction is propagated almost instantly across the network and confirmed within minutes. They are confirmed on a global network of computers and are therefore completely indifferent to your location. The fees and transaction time will be the same if you send Bitcoin to a friend in the same country or on the other side of the globe.
4. Security: Cryptocurrencies are locked into a public-key crypto system. Only the owner of the private key can send cryptocurrencies. Strong cryptography and the magic of blockchain technology make it virtually impossible to break security.
5. No Permission: You don't need to ask anyone to use cryptocurrency. It's just software that anyone can download for free. Once installed, you can receive and send bitcoins or other cryptocurrencies, no one will stop you, no need to wait for your bank confirmation

Bitcoin is not the first digital money

The most important part of Satoshi's invention was that he found a way to build a decentralized digital cash register system. There were many attempts to create digital money in the 1990s, but they all failed. After all centralized attempts failed, Satoshi tried to build a digital cash system without a central unit - a peer-to-peer network for file sharing.

Each of us has digital money

Many people do not believe in cryptocurrencies because they are digital money, but each of us today has digital money. Do you have a bank account? Do you have money in this account? You are now in possession of digital money. This is just a digital record in a bank account and does not reflect the actual cash or precious metal coverage our bank holds in its vault.

Have you ever wondered where the money for lending by banks comes from? Interest on deposits? For salaries for employees and maintaining branches? How do banks make money? Just from our money deposited in the bank, and we in return have an electronic record in our bank accounts. Banks "borrow" our money for other investments and business costs, and you, having an account in a given bank, agree to this - did you know that? Now imagine that all bank users suddenly come to the branch to pick up their capital - a purely theoretical situation. A bank holds 20-30% of cash as collateral, so if even 40% of its customers come to withdraw their funds at the same time, the bank may fail. Other banks will come to the rescue and support him under the Bank Guarantee Fund, but this may trigger a chain reaction. The more people will start to lose confidence in banks and choose their funds, the more banks will start to fail and there is not enough money in any bank to cover all the digital records in our accounts. There is no such possibility in cryptocurrencies, the currency record is permanent, it cannot be removed, and you can send your funds wherever you want at any time.