The Basics of Crypto-finance

f you’ve ever heard of Bitcoin or Blockchain, you have some of the basics of crypto-finance. If those words don’t mean anything to you, you must learn about them quickly, and they will lead you on the way to understanding and engaging in the unique world of crypto finance.  

Bitcoin

Bitcoin is where it all started and is the basis for the field. Putting it simply, bitcoin is a digital virtual currency. You can purchase bitcoin like it’s foreign money and spend it on shops online. You can also use bitcoin as an investment option. Although that is a risky choice considering the worth of bitcoin often fluctuates enough to make investment a high-risk decision. The most significant difference between bitcoin and the physical currency is that bitcoin is not linked to any particular country or province; it’s universal. So as you engage in crypto finance, remember that bitcoin is the universal currency that solely exists virtually. 

Blockchain

Bitcoin is based on the platform blockchain. Blockchain is considered a distributor ledger. The distributed part of that term means that it does not exist on one single computer but instead is distributed upon all computers. The ledger part of that term refers to a means of recording and tracking bitcoin. Who is spending what, where the money is being transferred to, who has how much, and much more. Consider it a large book that is growing all of the time. Just like the pages of the book are all bound together for a greater story, the blocks of blockchain are interlinked. Imagine the effect of the usage and spending of bitcoin like dominoes falling, and each domino is tracked and recorded.

Cryptofinance is a unique form of spending, that is here to stay. As we evolve and change as a world, and technology becomes an inescapable part of that, we need to learn the ropes, even as they are changing. 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

The Basics of Crypto-finance

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s