The main problem with traditional money, aka fiat currency, is, trust is required. You must trust your bank to hold your money for you. The bank can freeze, move, or steal your funds at any time - you just have to trust that they wont do that. Cryptocurrency eliminates the need for trust.
In this article, we'll be using Bitcoin as an example, since it was the first cryptocurrency and is the most popular cryptocurrency. When you create a Bitcoin Wallet, you own your money, and you're not trusting anybody else with it.
A Bitcoin wallet has two main parts - a public key and a private key. Your public key is essentially your wallet address; it can be shared publicly. When somebody wants to send you money, you give them your (hashed) public key, usually called a wallet address. When they send Bitcoin to that wallet address, it will end up in your Bitcoin Wallet. This is because your Bitcoin Wallet public key is unique and represents only your Bitcoin Wallet and nobody elses.
On the other hand, your Bitcoin wallet private key should never be shared with anyone besides yourself. Your private key is what allows you to move your Bitcoin funds. It's essentially a password (a really long one) generated for you, for your Bitcoin wallet. Because Bitcoin private keys are way too long to memorize or write down anywhere, wallets provide you with a 12-word phrase, which, when entered into the Wallet "Restore" (aka login) page, generates the associated private key, and allows you to access your wallet. This 12-word phrase is called a seed phrase. Here's an example of a seed phrase (don't even bother trying to use it, because it won't work 😊):
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As long as you don't share this seed phrase with anyone, you own your Bitcoin, and nobody else can control it. Seed phrases are very secure, and the seed phrase displayed above would take approximately 3 sestrigintillion years to hack into via a bruteforce attack (and yes, that's a real number).
In addition to the elimination of the need for trust, Bitcoin is also censorship resistant. This is because Bitcoin is decentralized. Hundreds of thousands, if not, millions of people around the world host Bitcoin servers, and are automatically awarded with Bitcoin (coins) by the network for doing so. All of those servers communicate with each other. This means that Bitcoin is decentralized - no single central entity/authority controls bitcoin. Nobody owns Bitcoin, nobody controls Bitcoin, and nobody can alter existing Bitcoin transactions. This means Bitcoin is unstoppable. It's also open source (the entire Bitcoin codebase is open to the public), is real digital money, has no requirements besides an internet connection, is transparent, and provides pseudonymity.
Bitcoin does have some problems, or, downsides, though. The three biggest problems are its slow network speed, not-ideal transaction fees, and lack of user privacy.
The Bitcoin network can process about 7 transactions per second, while Visa, the credit card company, can process more than 5,000 transactions per second. This, obviously, means that Bitcoin is very slow, leading to transactions taking up to 30 minutes before being considered complete/final in the blockchain. This is avoidable though. You can use Bitcoin on the Lightning Network (a blockchain/sidechain that assists Bitcoin) which is capable of processing over 1,000,000 transactions per second. But, you'll need a special wallet for that (which is very easy to find via a quick Google search). If that's too complicated for you, which it shouldn't be, you can use a different cryptocurrency (a Bitcoin alternative) like the "Nano" cryptocurrency. Nano can process about 2,000 transactions per second, and has absolutely no transaction fees. This makes Nano a great alternative to Bitcoin.
Though Bitcoin provides pseudonymity (nothing is attached to your name or ID), the details of every transaction you make are publicly viewable on the blockchain (sender, receiver, amount, block confirmations, transaction fees, etc), as well as your wallet balance. While some people may not have a problem with this, many people would like some privacy in regards to their wallet and transactions. Luckily, there are many "privacy coins" out there, but we only believe in one of them, and it's called Monero. It is a decentralized cryptocurrency which provides complete anonymity and privacy. Nobody can see your wallet activity (transactions, etc), or wallet balance. Monero also has very low fees for transactions (about $0.0014 worth of Monero per transaction) and is theoretically capable of processing over 1,500 transactions per second (about 214x faster than Bitcoin). In addition to Monero's speed, privacy, and low fees, it also provides longer seed phrases. While Bitcoin provides 12-word seed phrases (unchangable wallet passwords), Monero provides 24-word seed phrases. As hard as it is (pretty much impossible) to bruteforce into a Bitcoin wallet, Monero makes it more than 2x harder to bruteforce into wallets.
So, in the long-term, it would be a better idea to use cryptocurrency as the universal currency rather than multiple fiat currencies. We're already seeing Ukraine accept cryptocurrency as a donation (due to the Russia-Ukraine conflict), since it's currently the only way they can accept donations internationally, quickly, freely, and securely.
Below are links to the official website of Bitcoin, Monero, and Nano.
- Bitcoin (most secure & well-known blockchain)
- Monero (provides privacy, speed, & low fees)
- Nano (fastest decentralized blockchain & feeless)
We hope you learned something from this article; thanks!