Simply put, cryptocurrency is just digital currency. It’s not tied to any single country’s economy, it’s an asset represented in digital form that has monetary characteristics. The term cryptocurrency is sort of an alias – it doesn’t actually mean “currency that is cryptographic.”
Think of it this way, when “cars” were first introduced people referred to them as “horseless carriages” that’s the way that we should understand “cryptocurrencies.” As an alias for “blockchain tokens.” Blockchain tokens are a technology that can be used as money, separate from traditional fiat and commodities.
OK… SO… WHAT IS THE BLOCKCHAIN EXACTLY?
The blockchain is what keeps it all this currency (blockchain tokens) in order. Essentially it’s a shared database which is connected via a peer to peer network. This is a special database that not only ensures the same transaction can’t be done twice, but it also behaves as a shared ledger. This means there is a complete recorded history of all transactions for all users to see. Because of this shared ledger, when transactions are created, there is no need for a 3rd party’s involvement.
WHERE DO I STORE IT?
Cryptocurrency is stored in a digital wallet just like your cash, debit and credit cards are stored in your real life wallet.
SO WHY DO THEY EVEN EXIST?
Well, after the financial crisis of 2007-2008 some people lost a bit of faith in the traditional ways money was handled by governments and the banks. So they created their own currency and a technology to administer it. That technology is called blockchain technology.