What is Cryptocurrency?

Cryptocurrency allows for trustless and private financial transactions. It removes the need for a 3rd party of any kind to oversee or guarantee the exchange. What are the implications of this technology? It removes the need for a Central Bank. This is huge.

Cryptocurrency lives on the blockchain. It never leaves the blockchain. The blockchain is nothing more than a ledger that keeps track of all transactions. The ledger is kept by computers throughout the world, and is therefore, DECENTRALIZED. The more computers there are keeping the ledger (nodes), the more decentralized the cryptocurrency is. And the more holders of a specific cryptocurrency there are, the more decentralized it is. Ideally, the holders provide a kind of equilibrium of the total supply. If only a handful of holders are controlling the majority of supply, it’s viewed as a possible threat (centralized) because those holders could potentially sell off their holdings and crash the value.

Decentralization is the goal.

Because cryptocurrency lives on the blockchain, when anyone sends cryptocurrency as a form of payment (e.g., peer to peer cash) it’s not the cryptocurrency that moves, it’s only the ACCESS to that crypto that changes. One person has “keys” to their crypto, and they “send” their crypto to another person and now only that person has access to that crypto via THEIR keys. Not your keys, not your coins. Centralized crypto exchanges are the most dsngerous place to “hold” your crypto because the exchange has keys to your coins, and history has shown that they might not behave morally - just like any bank. Self custody is absolutely mandatory to ensure that only YOU (your keys) access your crypto. 

A key, or keys, is a seed phrase (password) to your “wallet.” But wallet is a misnomer. There is no such thing as an actual wallet because your cryptocurrency lives on the blockchain and not in another place (or entity) called a wallet. A so-called “wallet” is actually more like a keychain, holding your keys. Your KEYS allow access to your cryptocurrency, and that crypto lives on the blockchain forever.

Digital currency, by contrast, is nothing more than digitized FIAT currency. It’s government cash in digital form. Huge difference. PayPal and Cashapp are examples of digital currency. Your name is attached to this currency, your credit score, your banks, your entire financial history is attached to digital currency. Not only that but it’s the government money (fiat), which means it’s losing value to inflation every day. Cash is trash.

So how is cryptocurrency private? Your name is not attached to your crypto holdings. Your public “address” is a series of long numbers and letters, and this public address is your “identity.” If you aren’t careful, however, you can easily give up your identity. And because the cryptocurrency lives on the blockchain, your holdings can be viewed by anyone who has your public address. Your crypto can’t be controlled (moved, sold, swapped) without the keys, but the holdings can be viewed. This is like anyone being able to view your checking account. Be careful sharing any public address that has large crypto holdings. Make a new “wallet” address for simple sends and try to spread out your holdings to avoid becoming a target of violence in the real world.  

With on-chain analysis as advanced as it is today, cryptocurrency is not actually 100% private - but it is considered PSEUDONYMOUS. Nobody can ever prove that a series of letters and numbers is tied to a specific person, though many may try.

What is the value of this new technology? So far, the market has valued the first mover - Bitcoin - at over 100k per coin. And many think it’s worth much more, but ”price discovery” is only just beginning for this revolutionary technology. Is Bitcoin the one and only? No.

Ask yourself: has any technological revolution ever stopped with the first iteration? No.

Can cryptocurrency improve upon Bitcoin? YES.

It already has - HEX.