What is Cryptocurrency?

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Many people hear the term cryptocurrency and have a vague concept of what that means, but few people know the fundamental aspects that go into creating it.

A few things that make a cryptocurrency (crypto) are: a digital asset that acts as a medium of exchange using cryptography to secure the transactions.

Crypto has no physical form, supply is not determined by a central bank, network is decentralized, supply exists only in the network, and the crypto acts with a set of restrictions set forth by the network when it is first created. If these things exist then you can have a crypto. Let’s dive into and expand on these details.

Crypto

While crypto does act as a medium of exchange, it is not the same as having a dollar bill in your hand to pay for something. The currency lives inside of a database and is secured by the use of cryptography (if it is easier then think of very complex math algorithms that keep the database and transactions secure), and to make sure the transactions are executed securely the database is a peer-to-peer network that is available on a public ledger for everybody to see (while keeping the sending and receiving parties anonymous). This keeps the transactions public, secure, and makes sure that transactions do not get doubled (limiting the ability to scam somebody). When you send somebody crypto, you are actually submitting a “restricted” entry into the network and the network makes sure the entry is executed and only executed once.

Next we have to look at what makes it a “restricted” entry. Almost all cryptos have these characteristics set forth from the outset: entries are irreversible, they are anonymous, they are fast and accessible anywhere in the world, they are designed to be very secure, and there is a limited supply as stated by the network. Once you send crypto to somebody the entry cannot be reversed for any reason. This is a great reason to make sure that you have the proper address when you send because there is no way to retrieve it once it is gone! Anybody can make an account to buy and sell crypto, and for the most part these accounts are anonymous (depending of the currency, and platform/site to buy and sell). The entire design of a crypto is for it to be as secure as possible using complicated cryptography (math equations). This is one of the reasons for crypto being so desirable. Lastly there is a limited supply set forth by the network so one person, bank, or government cannot simply decide to make more. This limited supply ensures that there will not be hyperinflation for any man made reason.

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Blockchain

You may be wondering how this entry is executed, or how it gets processed in the network. This is where the term blockchain comes into play. I am going to save the thorough explanation of what a blockchain is for another article but the basics are as follows.

The cryptocurrency itself is the incentive for miners (or nodes) to “solve” the next block. A block is a group of entries as discussed before, and the chain is the “hash” that connects these entries and executes them. The hash is a cryptologic puzzle that connects the blocks. To solve this puzzle, nodes mine the solution that connects the blocks together. This takes time and energy (think electricity) to solve the hash.

The reward for the miners is to receive cryptocurrency for their efforts. This mining is what keeps the network executing entries/transactions quickly keeps the network up and running. Without the incentive of the currency then the network would cease to exist. This is why you see speed fluctuations from time to time depending on the price of the crypto you are trying to buy or sell.

Using crypto is the easiest way to submit and withdraw funds from online sportsbooks, with Bitcoin, Bitcoin Cash, Etherium and Litecoin accepted as deposit options. If you do not own any then I recommend getting into the market simply to make this part of the process easier for yourself. You can submit money onto a book in seconds plus eliminate the tedious credit card transactions fees.

When you withdraw it is much quicker than waiting for a bank transaction or the dreaded check in the mail that inevitably takes 6 weeks, crypto is your best friend for online sports betting.

 

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