Cryptocurrency explained… kind of!

Photo Credit: Bitcoin News

Crypto who? Cryptocurrency is virtual or digital  money that has secret codes embedded in it, to make it safe and secure, and in some cases, gives the owners an alias, so that their true identity is kept secret.

Why do we need this? 2008 was a time of great unrest in the world, as there was a big financial crisis. The biggest banks in the world went bankrupt and lost a lot of the money that various people were saving there. Many innocent people lost their money, jobs and homes. These people lost faith in the banks and governments that let them down.

Enter Satoshi Nakamoto!

Who is that? Satoshi Nakamoto is a person or group of people whose identity (ies) are secret! Satoshi Nakamoto launched their own secure and encrypted money called bitcoin, to create a fair system that gives everyone control of their own money, shares and other belongings, without the need to completely depend on banks that failed them. Power to the people! 

How does bitcoin help? So Satoshi Nakamoto were so unhappy with the big banks, that they decided to make a world where people can buy and sell with a digital encrypted currency called bitcoin. There are many other digital currencies that have launched since then. Some of the better known ones are Ethereum, Litecoin, Zcash and Dash. These are not particular to a country or area, but can be used to buy things anywhere in the world. 

Can we see these coins? They are stored online in a digital wallet, and can be used to buy things in the real world or online. For example, many restaurants and stores now accept payment in bitcoins.

OK, I get it. But who keeps track of all the exchanging of all this money in different forms? In the real world – If Alice wants to sell something to Bob – Alice will want to make sure that Bob keeps his promise to pay her for the goods she sends him; like-wise Bob will want to ensure that Alice keeps her promise to deliver goods to him if he pays her. Banks do not ensure that Alice and Bob are protected if one fails to keep his or her promise. They offer a service to protect them, but this costs a lot of money.

Enter blockchain! 

What is blockchain? Bitcoin is based on a technology called blockchain. Blockchain is a global public internet service that records everyone’s promises to each other and ensures that everyone keeps their promises to each other. The promises can be ownership of goods or money. Exact copies of records of ownership of money or goods are kept on millions of computers on the internet – these records are collectively called the blockchain. Each time money or a good moves from one person to another, these records are updated on all the computers – ensuring that everyone knows who owns what so that no one can be cheated. Because the records are kept in so many different locations, they are secure. Yay! 

The Blockchain is called the Trust Machine, because it records these promises and ensures that everyone is keeps them.

Hmm… a lot to think about. More on bitcoin and its soaring value next week!

Contributed by Simran Mulchandani, Director, Lykke Asia




Spread the love
No Comments Yet

Leave a Reply

Your email address will not be published.

Write to us at

Help us keep currentkids, current! We’d love to hear about your crazy adventures and experiences. Send us your pictures, travel diaries, thoughts on cool new gadgets, gaming experiences and anything else you find interesting!

About Us

Welcome to our entertaining and empowering news source for kids with inquisitive minds! This is a digital space that keeps kids aged 8 and above (and your families!) connected to what’s happening in the world. We filter a wide variety of news, events, and interesting bits of trivia to develop short, relevant, unbiased content in creative formats. We give everyone something to relate to and get engaged with in short bytes of information with a snappy, chatty feel. We believe in encouraging curiosity, creativity and continued learning in our safe digital space.

Why is reading non-fiction important?

This helps curious minds to learn more about the outside world. It also enriches their vocabulary and their general knowledge. Simplified news helps children to express their opinions easily with their friends and family and gives them some perspective on complex issues. Our safe news website will give you parents a useful tool with which to navigate the digital world with your children.

We hope you enjoy our posts!

Biyash & Sunaina

Subscribe to our weekly newsletter and stay current!


You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.