What’s the point of cryptocurrencies? Why were they invented?

One of the reasons was to prove you could create digital currency that could not be faked, copied or hacked. This can be real technical but here’s the basics.

Everything digital can be cut and pasted (copied). BTC prevented cut and pasting of coins by creating an accounting ledger where credit transactions could be created and tracked but not copied because there was no coin to copy. Simple and brilliant. BTC accomplish this by using a ledger system. If you got one BTC coin, instead of transferring 1 coin to your control, you would get a transaction crediting you with one BTC. If you transfer that going to someone else you would get a transaction debiting you with one BTC. When these two transactions are added to gather, you get a zero balance for your account. All accomplished without ever transferring BTC coins.

And because all control of your coins are placed under a private encrypted key only the person with this private key can control them. This crypto key is one no one else can hack. No one can fake a coin or copy a coin because there was no coin. And no one can steal it because the private key is not Hackable. There are only credit and debit transactions in a public ledger. The ledger was purposely made public so that all transactions could be easily validated per a set of rules that made sure no one was cheating. These rules are basically mathematical. So the validation is not subjective. The validation is done with math so it is objective.

The people doing the validating are called miners. And because there are many different miners instead of just one miner, no one person controls the ledger. With this system all minors must agree that each transaction passes the math rules that guarantee it is real not a cheat.

Most of the cryptocurrencies created after bitcoin are simply exploring different versions and different features of what cryptocurrency can do. The core of every cryptocurrency is its database called a Blockchain. It is probably more accurate to say that every blockchain created after BTC’s chain is exploring what a Blockchain can be used for. Including those that are made by scammers who are trying to use a Blockchain for scamming other people out of money.

This is my version of the basics, other will explain it differently. hopefully this help create a beginning understanding. It is complex. There are checks and balances that when put together makes a system that works.

At the end this is a system that allows the people to create money that the government does not control.

I personally look at cryptocurrency as an important evolutionary step in the history of humanity.

An earlier step, was the formation of the united states. People wanted to create a new government that separated church and state. People wanted to get the government out of their religious lives.

Now, the next step, cryptocurrency makes it possible to separate money and state. So they could be getting the government out of monetary policy and having state controlled money.

Both of these steps or about reducing the responsibility of the state for the people. And both of these steps are about increasing the responsibility of a people for their own lives.