The ‘What, Where and Why’ of Cryptocurrency


Information is the oil of the 21st century, and analytics is the combustion engine.

– Peter Sondergaard, former Executive VP of Gartner, a US based global research and advisory firm.

There cannot be a better time to be alive than now if you fancy torturing reams of data and tout your clients for a strategic win OR if you are an individual scouting for mega trends that an information set has to provide. 


Data mining is all about that: extracting and discovering patterns in large data sets, engaging in machine learning, statistics, and database systems. And advances in computer technology have increased its scope multifold in almost every industry space, including finance. 

Although there are many advantages, including how fin-tech invigorates the entire field of finance, there are downsides as well. Data threats related to theft, corruption and privacy. Cryptography seems to be the answer. And you must be living under the rock to not know which direction the article is taking now.


Cryptography has made it possible to protect information from the risks associated with data storage and distribution through what is called ‘encryption’.

The concept of encrypting data is not new to those connected to the world through ‘internet of things’. What WhatsApp promises when it says, ‘it provides “end-to-end encryption” to your messages’, is one of the real-time examples. 

However, even before the digital era, people have been cryptically enshrouding messages to prevent unintended audiences from reading them. But the increased use of digital machines has taken the science of encryption to a whole different level. And Cryptocurrency could be what we can call as, its prodigy.

Understanding the vitals of cryptography is critical to understanding Cryptocurrency. Is it a mere psychological hype or real currency replacement?

More on the background of Cryptography:  


Cryptocurrencies leverage several advanced cryptographic techniques, primarily used to: ensure the security of data stored on blockchains and authenticate transactions. One such is an Elliptical Curve Digital Signature Algorithm (ECDSA) which supports various cryptocurrency systems, as a means to providing extra security to fund transactions.


But first, what is a Blockchain?

Blockchain technology became the ultimate answer to finding computationally practical solutions for time-stamping, append-only digital documents so that they could not be backdated or tampered, in any manner. 

It has resolved various data-related issues by-

  • Anonymising personal data
  • Recording identical data that are time- and data-stamped
  • Creating instant traceability through decentralisation and clear audit trails
  • Completing transactions in a fast-tracked and efficient manner
  • Automating transactions through smart contracts (more like digital agreements)


As much of an active catalyst in the FinTech space, the benefits of Blockchain are not reaped only in banking and finance but also in Supply chain, healthcare, pharmaceuticals and many more. In a nutshell, blockchain technology has made it relatively easy for us to trust the data shared across business networks and feasible because of its cost savings and efficiencies.

More on the blockchain technology: Benefits of applying blockchain in any industry



In 2008, a white paper was emailed to the cryptography network, introducing how a peer-to-peer electronic cash system would allow online payments to be sent directly from one party to another without going through a financial institution. It was called the Bitcoin (BTC) and was published under a pseudonym, Satoshi Nakamoto. The paper explained how Bitcoins can be ‘mined’ for a reward using the proof-of-work mechanism by individual miners and then verified by the decentralised nodes in the network. As a result, Bitcoin, the first Cryptocurrency came into existence, ushering the integration of blockchain technology and decentralised digital currencies.

In case you are wondering, Bitcoin is not the purest form of innovation in the realm of digital currency. It was DigiCash, Mondex, CyberCash and few others. In fact, the failure of these early digital currencies was the one to pave for the success of BTC.

You can find an interesting read on this topic here: Amazing stories of Cryptocurrencies before Bitcoins


So how are BTC and many other coins and tokens set up?

Bitcoin and Ethereum are two popular blockchain technologies that have their native currencies BTC and Ether. All these are closely similar but differ in the ways they are built and how they operate their decentralised applications. We will be covering more on the ways to identify and trade in various digital assets in our upcoming articles.

An ecosystem built on this entire blockchain network aiming at an open-source, transparent financial service platform that requires no central financial intermediaries and is available to everyone to transact and operate is called the Decentralised Finance (or DeFi). On DeFi, we use smart contracts instead of brokerages, exchanges, or any other arbitrators.

Through Decentralised exchanges (DEXes) we started creating value in things that did not have inherent value. These act as open finance platforms in facilitating the trade of digital assets without the need for a trusted intermediary (the exchange) to hold their funds. The trades are made directly between the digital wallets of traders with the help of smart contracts. 


There are 4000+ tradable cryptocurrencies, regulated by their own community of users, secure from currency debasement and inflation. And this is not all.

In this article, we have only scratched the surface of mounded information, necessary for you to know before trading in various cryptocurrencies. We will be discussing various digital assets and the adventure that they may take you on if you decide to take that ride. And even after covering most of the indispensable topics, it is important to introspect if you are ready to explore this new economy where the fiat currencies are replaced for anything and everything digital. 

Watch out for this space for more on these topics. Let us learn together!

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