This is a digital form of currency not regulated by Central
Bank Authority.
The first cryptocurrency was bitcoin created by an anonymous computer
programmer or a group of programmer known as Satoshi Nakamoto in 2009.
They were concerned about the traditional currency reliant, the
trustworthiness of banks that was dependent on the government working properly.
Traditional currency was denominated in livestock lie cows, goats,
camels and bags of maize and beans. It required intermediaries for distribution
and regulation by the concerned authority.
Cryptocurrency is digital money built on a decentralized block chain networks
to enable trustless transactions.
Cryptography
The study of securing process communication techniques. Used in
encrypting and decrypting emails and general messages.
Types of cryptography
1. Secret key cryptography
It is also known as symmetric-key cryptography. The single key needed to
encrypt and decrypt messages is shared secret between the communicating
parties.
2. Public key cryptography
It is also known as asymmetric cryptography. I t uses pairs of related keys.
Each key consist of a public and a corresponding private key.
3. Hash cryptography
This takes inputs of a variable length to return output of a fixed length.
Types of Cryptocurrency
1. Payment cryptocurrency
2.
Utility tokens
3.
Stable coins
4.
Central bank digital currencies
In today’s world, the main cryptocurrencies include
Bitcoin
Etherium
Litecoin
XRP
Dogecoin
Steps in Purchasing
Cryptocurrencies
1. Choose a cryptocurrency exchange:
2. Create an account
3. Set up a payment method
4. Buy the cryptocurrency
5. Secure your investment
How to store
cryptocurrency
Cryptocurrency
relies on owner’s ability to store it.
The
different ways of storage vary in accommodation, size and security of the
currency
Safety
measures to enhance security back up using the appropriate storage wallet.
Different forms of
storage include
¡ Cold wallet
¡ Hot wallet
¡ Physical coins
¡ Custodial wallet
What cryptocurrency can
buy
¡ Technology and E-commerce
products
¡ Some car dealerships
accept Bitcoin as payment.
¡ Insurance – to pay premiums
¡ Jewelry and expensive
products like watches
¡ News Media
Reasons for the
increased popularity of cryptocurrency
1)
Speed
2)
Low transaction cost
3)
Accessibility
4)
Security
5)
Privacy
6)
Transparency
Cryptocurrency Frauds and Scams
·
Ponzi Schemes
·
Promises of ridiculously high returns
·
Unregistered investment projects
·
Use of sophisticated investment strategies
Malware
Two types; ransomware and crypto logger
Fake Crypto Services.
Advance fee scam.
Fake ICO.
Money laundering.
The Future of
Cryptocurrency
The
future is somewhat uncertain and difficult to predict because it is evolving
rapidly with time.
Some developments may include
ü
Increased adoption.
ü
Government regulation due to regular changes on
policies.
ü
Integration with traditional financial systems.
ü
Competition from other digital currencies.
ü
Increased use in developing countries.
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