The word ‘Crypto’ essentially comes from Bitcoin, which is the first and the largest cryptocurrency in the world. The entire crypto evolution started with how we can leverage Bitcoin in value transfer. Basically, Bitcoin will help you transact one and one, and not having middlemen like banks in between.
For instance, in a Google pay transaction, the third parties involved are Google and banks. The dependencies are on them to process it effectively. This is where decentralization comes into the picture.
In 2009, an individual or a group of individuals by the pseudonym Satoshi Nakomoto, invented Bitcoin to operate in a decentralized manner. If I am sending you, say 1 BTC, there’s no one else involved other than you and me, in this transaction.
How does it get processed?
It is broadcasted to a network of common people known as miners. Now when we talk of miners, what we imagine is people mining underground. In this case, these miners are involved in processing these transactions through computers or large machines. When they successfully process the transaction, they get rewarded with 1 BTC.
Another specific feature of Bitcoin is its scarcity. We know governments are providing stimulus or injecting liquidity in the economy, which means there is a high supply of fiat currencies. When there is high production of our daily currencies like USD or INR, the purchasing power of the savings of common masses like you and me takes a downturn. At these times, people used to buy gold, as its supply is limited, unlike our fiat money.
Bitcoin imbibes the exact same properties, there are only 21 million Bitcoins in existence, of which 18 million have already been mined. This feature of Bitcoin makes it the most valuable cryptocurrency in the world. One of the benefits is that you have full custody of your asset, i.e, Bitcoin – you can store it in different wallets like hardware, online, paper, etc, as per your convenience.
You can also watch this video to understand Bitcoin and crypto
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