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What are Cryptocurrencies? – Seven Finances

What are Cryptocurrencies?

Don’t worry if you are new to the crazy world of Crypto. We are here to help.

You may know all about cryptocurrency, you may have heard of it or you may know absolutely nothing. Here are the key points:

Bitcoin was the first cryptocurrency; it went public in 2009. There are now over 4,000 different cryptocurrencies. This is an umbrella term that refers to tokens and coins. Not all ‘cryptocurrencies’ are used for trading or payment. Tokens such as Ethereum are designed almost like the App Store so that other users can build upon them for business contracts, for example.

Cryptocurrencies use encryption (cryptography) to produce money and to verify transactions. These transactions are added to a public ledger, also known as a Transaction Blockchain. Unlike traditional fiat currencies (which are usually backed by some central government) such as Pound Sterling, the value is entirely based on the utility the coin will create hence the massive increase we have seen in the value of cryptocurrencies. New coins are retrieved through a process known as ‘mining’.

The technology was first used by Satoshi Nakamoto in the development as what we now know as Bitcoin. Developed as a response to the financial crisis of 2008, Blockchain is the software platform that allows crypto currency to run as a truly decentralised, totally secure system. Blockchain technology underpins anything that requires large amounts of computer power including machine learning, graphics rendering, big data analysis and weather. It allows digital information to be distributed but not copied.

A shared, continually updated database records block chain information. The Blockchain database is not stored in a single location. Therefore, records are entirely public and easily verifiable. Millions of computers host the database simultaneously and anyone can access its data, ensuring transparency within the entire network, thus increasing public trust in the system as compared to the traditional fiat system.

Mining is the process in which the blockchain ledgers are updated. Example: If Bob sent Sarah some Bitcoin, this would be processed and recorded on the public ledger by the mining rigs.

In return for upkeeping the system of that particular coin or token, the owner of that mining rig will be paid a ‘thank you’ in the form of a small proportion of said coin or token.

Essentially, you are being paid for providing the computer power. This can be extremely lucrative. It is these mining rigs that we at Seven Finances specialise in building and selling to our amazing customers.

Are you ready to step up your business?