An introduction to digital currencies or crypto currencies as they are often called as well. Most popular example is bitcoin, most people probably heared that expression already.
What is it all about these (bit-) coins?
Bitcoin is the most popular digital currency across many digital or crypto money. It is like the cash of the internet, if you like, completely digital money. It is based on a decentralized peer to peer network (like BitTorrent) without any central authority. No one controls it, there is no government. Your coins are stored in a wallet, like cash. If you loose your coins (eg. delete your wallet file) all your coins are lost.
Besides Bitcoin, there are thousands of other coins or tokens available. Some of big value as well, like Ethereum or Solana, but also other tokens worth only a fraction of a Dollar. Some are decentralized like Bitcoins, others got released by a company who got control over the supply.
What can I do (buy) with it?
Digital coins can be used like cash: You can buy items online, if a shop accepts bitcoins. You can exchange them into any other currency like USD or Euro at an exchange. So these coins really got a value and are traded online. As the whole topic is only a couple of years old and did not yet reach the mainstream, there are not yet that many places where digital coins are accepted in the real world. However, there are already ATM’s for Bitcoins and more and more companies are thinking about introducing them into their business processes. In El Salvador Bitcoin got even accepted as a legal tender. So Bitcoins came far in the last couple of years and everybody should start digging into that topic.
How do I get them?
Acquiring Bitcoins can either be done
- by changing FIAT money like Dollars or Euros into digital coins or tokens
- someone is giving them away for free
- or you can mine them (although this is not really profitable any more for the average person)