The rise of technology has changed people’s lives rapidly. The way people communicate, work, and even pay for goods and services have all been impacted by technological advances. Our own campus at the University of Guelph is now a cash-free campus and only accepts payments made by card or using mobile payment technologies like Apple pay. Now, technology is going even further with a new payment system called cryptocurrency.
You’ve likely heard the term cryptocurrencies, and may even be familiar with the original crypto, Bitcoin. Many people have heard of cryptocurrencies but don’t fully understand what it is, so we’ve done the research for you in this Cryptos 101 blog post.
What is cryptocurrency?
Cryptocurrencies (aka "cryptos") are digital currencies. Transactions are verified and records maintained by a decentralized system using cryptography, rather than a centralized authority like a bank. The cryptography makes them incredibly secure, and these encryption techniques are how the word cryptocurrency came about.
Rather than physical money, crypto payments are entirely digital. These payments are digital entries to an online database that records transactions.
Many cryptos are built using blockchain technology, where transitions are recorded into “blocks” and time stamped. Blockchain is a decentralized technology that’s spread across many different computers, ensuring security.
Types of Cryptocurrency
There are more than 12,000 different publicly traded cryptocurrencies. As of October 2021, they total a market cap of 2.462 trillion
Bitcoin is the most popular and most valuable cryptocurrency, representing 47.0% of crypto's total value. Launched in 2009, it was the first blockchain-based crypto, and as of October 2021 has over 18.8 million bitcoins in circulation with a market cap of $1.181 trillion. Inflation and manipulation are prevented as there are only 21 million bitcoins in existence.
Another popular option is Ethereum, which uses the same blockchain technology as bitcoin but has it’s own programming language. Etherium is an open-ended decentralized software platform that is both a payment network and a host for smart contracts and applications. Many NFTs, non-fungible tokens, run on Ethereum. As of October 2021, Ethereum has a market cap of $449 billion.
Written by Abby Kays