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What is Peer to Peer Cryptocurrency?

 

 

Cryptocurrency — it’s the talk of the 2020s. These days, it seems like every news outlet wants to talk about cryptocurrency. But do they really understand what it’s all about? 

One of the terms that get thrown around a lot in proximity to bitcoin is peer to peer. You might understand what a peer is, but still have no idea what peer to peer cryptocurrency means. 

This article will walk you through the term peer to peer. It will also teach you how it applies to the philosophy behind the cryptocurrency exchange.

The Origins of Cryptocurrency

The cryptocurrency was introduced in 2009 when the anonymous entity known as Satoshi Nakamoto published his whitepaper on Bitcoin. Its goal was to create a currency that operated without the interference of the government. 

The fact that the currency was completely digital meant that no one would have to worry about minting money — which is one of the ways that a government usually controls economic systems. 

The introduction of a new technology called blockchain — whereby non-government people verify each individual transaction — made it so that interactions were safe without any hand of the government being involved. 

This completely user-based economic experience is the ethos of peer to peer. Part of Satoshi Nakamoto’s mission was to move towards a world where business can flow freer and more wealth can prosper in the world due to a less regulated form of trade. 

No One Owns the Blockchain 

One of the biggest misconceptions about cryptocurrency, and the whole world of peer to peer trading, is that someone “owns” the blockchain. In fact, the term “the blockchain” is misleading in-of-itself. 

Blockchain is simply a way of making sure that transactions are authentic by verifying interactions and storing that data in clumps known as “blocks”. People are incentivized to make sure these blocks are secure with a cash reward. 

The idea here is that everyone is acting for their own self-interest, and thereby keeping the world of cryptocurrencies purer. In many ways, the peer to peer philosophy and cryptocurrency, in general, is based on a principle that a government acting for some idea of the “common good” does not work for business.

Litecoin is one of the most peer-to-peer currencies out there because it focuses on low — and oftentimes no — transaction fees. Other cryptocurrencies focus more on investment. But litecoin is moving towards a world where we can exchange money without government interference.

Check out this great article we found on litecoin Price, which will help walk you through this complicated subject. 

Understand the Peer to Peer Philosophy

Understanding the term peer to peer is important in understanding where our world is headed as a result of cryptocurrency. Like it or not, we’re moving into a world where federal regulation is less needed. Cryptocurrency is leading us into this world. 

For more articles like this, check out our “business and finance” section. 

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