What is Cryptocurrency?

Cryptocurrencies use cryptographic protocols or extremely complex code systems that encrypt sensitive data transfers, to secure their units of exchange. Cryptocurrency developers build these protocols on advanced mathematics and computer engineering principles that render them virtually impossible to break, and thus unfeasible to duplicate or counterfeit. These protocols also mask the identities of cryptocurrency users, making transactions and fund flows difficult to attribute to specific individuals or groups. Cryptocurrencies are also marked by decentralized control. Cryptocurrencies’ supply and value are controlled by the activities of their users and highly complex protocols built into their governing codes, not the conscious decisions of central banks or other regulatory authorities. In particular, the activities of miners – cryptocurrency users who leverage vast amounts of computing power to record transactions while receiving newly created cryptocurrency units and transaction fees paid by other users in return – are critical to the currencies’ stability and smooth function.

More importantly, cryptocurrencies can be exchanged for fiat currencies or other cryptocurrencies on special online markets called crypto exchanges. Each listed cryptocurrency has a variable exchange rate with major world currencies (such as the U.S. dollar, British pound, Euro, and Japanese Yen as well as major cryptocurrencies like Bitcoin, Ether or Ripple). This will also be the case with the token once it is listed. Most cryptocurrencies are characterized by finite supply. Their source codes contain instructions outlining the precise number of units that can and will ever exist. In the case of the Eco Reward, the maximum number of coins authorized by the code is 80 billion units. This makes a notable difference with fiat currencies where Central Banks can decide to create money at will.

Due to their political independence and essentially impenetrable data security, cryptocurrency users enjoy benefits not available to users of traditional fiat currencies, such as the U.S. Dollar and Euro, and the financial systems that those currencies support. For instance, whereas a government can easily freeze or even seize a bank account located in its jurisdiction, it’s very difficult for it to do the same with funds held in cryptocurrency – even if the holder is a citizen or legal resident.