I Understand What Cryptocurrencies Are, But Like Where Are the Cryptocurrencies?
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A fascinating concept created by someone no one knows about? Yes read that sentence again. So then why are we paying so much attention to the cryptocurrency revolution being that the “inventor” has not appeared? I guess it will be one of the mysteries of life that will remain unanswerable. Oh and there is another one as well. Where are the cryptocurrencies?
This seems to be a tough concept to grasp since we understand computing, servers, internet connection, passwords, databases, and a lot about technology compared to a few decades ago. A lot has changed in the sense of interconnectability with our appliances, phones, and even our cars. We understand what Wi-Fi is and how it functions, we understand the old modems we used to carry around, and we understand concepts of quantum computing at least in layman terms. But where are the cryptocurrencies stored?
A personal digital wallet can be a place where a cryptocurrency can be stored. The code written for a specific cryptocurrency program runs through servers and is stored in databases on said servers. The strings of code are running day and night thanks to miners that continue to mine Bitcoin. I know I am still figuring this out. Mine Bitcoin meaning they are using their computing power to allow the program to continue running code that will eventually produce more Bitcoin and keep the network running. The Bitcoin is then held in a wallet with a specific address that accepts and notifies the user of any new funds deposited, withdrawn, or still in the account. The ledger or virtual register is up-to-date and tells you exactly how much Bitcoin you own as well as a tally of your transactions including transaction fees.
Being digital and non-physical, abstract yet economically pegged inevitably, and new but repeating the mantra “supply and demand”, Bitcoin holds value, but what holds Bitcoin? The Bitcoins are held in a specific repository within the network and the repository can be accessed through your password and key. After providing the password and key, the Bitcoin account can be accessed, viewed, and an individual may send the coins to another address initiating a transaction.
The benefits of this use case include being able to have something that stores value without having to carry it with you as other physical items. Yes you need a phone or computer to access it, but the phone or computer do not store the information per say. Whereas in the past only physical items held value like silver coins, jewelry, or fiat currency, Bitcoin allows the ability to have a virtual address that stores funds. The virtual address can be accessed anywhere there is internet as long as you keep your password and key safe.
There are other things that come to mind when thinking about storing Bitcoin. How do I know the wallets are safe or which wallets are legitimate? There is a community of developers that seeks the greatest good from technology and will attempt to help answer questions. As a cryptocurrency learner, it is important to continue finding resources online or in person who may help give advice or provide more information. Books can also help on the topic. The number of cryptocurrency books is increasing with individuals already having close to more than ten years of experience of cryptocurrency.
While the world of cryptocurrency is still in its infancy, there is so much potential that can be converted into actual good. For me, the greatest detractors to Bitcoin were concerning the previous point. Another point is that how do we know that a forked coin will not cause the value of the original coin to fluctuate. While Bitcoin is inflationary, when coins fork, there is a doubling of the number of coins. They may not be the original Bitcoin coin, but there are still coins with Bitcoin’s name being produced. This causes confusion to many including myself. How do you distinguish Bitcoin, Bitcoin Cash, and Bitcoin SV initially? How do you know which coin will hold value in the long run? Will inter-operability later allow for coins to merge after a fork or will endless forks occur once consensus is reached. Only time will tell.