Introduction To Cryptocurrencies.

Hello KuBitan. 👋

We at KuBitX are obliged to introduce you to the new world of the internet of money. It is a paradigm shift that has been taking place for the past 10 years and is set to change the current status quo in finance and e-commerce. You wouldn’t want to miss out on revolutionary matters, would you?

Brace and prepare yourself to learn more about this amazing new world.

By the end of this session you will be able to understand:-

  1. What are cryptocurrencies?
  2. The history of cryptocurrencies.
  3. How cryptocurrencies work.

What are Cryptocurrencies?

A currency is an instrument or tool that is used to exchange value from one entity to another, in the current times the most commonly used instruments are fiat currencies such as the US dollar, Nigerian Naira, the Kenyan Shilling and so on. These currencies are normally regulated by central entities such as banks and governments causing some a few challenges like high transaction fees during wire transfers, long waiting periods during international transfers and inflation.

Crypto came from a Greek term “Kruptos” which means hidden. There have been very many ways of conveying hidden information in the presence of third parties and cryptography is one of them. The sender encrypts the information and sends to the recipient in a form nobody else can understand, the receiver on receiving it decodes the message and reads it. Encoding and decoding information has been an effective way of hiding information which traces back to very ancient times.

Cryptocurrencies are intangible digital currencies that are cryptographically encoded, limited in supply and are not regulated by any central authorities but the people, this gives them nature of decentralization and a sense of liberation putting the people in control.

The very first successful cryptocurrency to be invented back in 2009 was Bitcoin (₿) by an unknown figure Satoshi Nakamoto. The reason why I emphasized on successful is because there were other digital currencies which had been previously invented and never took off, such as Digi cash. Satoshi’s vision was to create an open source, scarce unit of trust that runs on its own network, is regulated by the people (anyone who wishes to), and one that solves double spending.

Let’s take a look at some of top 100 existing cryptocurrencies below. As you can see on the figure below bitcoin is at the top place, having been in this space for over ten years now it has gained a lot of traction and trust from people across the world.

Visit Coinmarketcap.com

Overtime bitcoin (₿) seemed to gain a lot of traction because of its massive price surges which were brought about by huge demand of the coin. Many people started preferring to use bitcoin to send money from one person to another in any part of the world, others preferred to keep and hold onto it as a safe haven or a form of investment having seen its price surge from $0.006 in 2009 to $200 in 2012 (we call it mooning 🚀🌛), others preferred regulating its network and getting rewarded in bitcoin for confirming bitcoin transactions in a process known as “Mining”.

₿ had unique features which contributed to its mass adoption by the people, I remember coming across an image on social media where this particular child held a poster indicated “Mum send bitcoin” in an ongoing political demonstration, I also remember the tale of the man who purchased pizza with 10,000 units of bitcoin making it the most expensive pizza ever on planet earth. He must be in a constant phase of regret, I believe you do not want to be like him, so 💁‍♂️💁‍♂️💁‍♂️💁‍♂️

keep on reading….

So let’s take a look at what makes cryptocurrencies unique:-🕵️‍♂️

  • Peer to peer transactions: It is possible to send or receive units of value in bitcoin or other cryptocurrencies from any part of the world for as long as you are on earth……..😂😂😂. Without having to visit your bank, you can send your million dollars in bitcoin, amazing right? The hurdle comes in converting the million dollars to cryptocurrencies since banks seem to have put a tight regulation on that, well KuBitX does have a solution to that.
  • Low transaction fees: Sending money to any part of the world has become seamless thanks to cryptocurrencies, sending money at zero or close to zero transaction fees is another amazing feature that cryptocurrencies have introduced, since there are no third parties such as banks, your funds in form of cryptocurrencies such as ethereum (ETH) or KuBitcoin (KBX) are directly sent to the receiver from your wallet after getting recorded on an open public record/ledger.
  • Fast: Comparing to the current wire transfers which take up to 3 days for a transaction to be authorized by your bank with cryptocurrencies transactions get confirmed within a few seconds or hours. This depends with which cryptocurrency you are dealing with.

Bitcoin being the first born cryptocurrency brought about the rise of new cryptocurrencies which tried to solve some of the problems bitcoin did not seem to solve, these new cryptocurrencies are known as alternative coins (Altcoins). The concept of tokenizing things has become so rampant that you will find intangible objects such as services being equated and accounted for in units of value known as Tokens. This is something that has not happened before. For example yesterday night I came across a particular social media application that is specifically designed to reward you for the time you spend in it and the level of interaction you stimulate. Revolutionary right? You can only imagine how much you would get remunerated for the number of likes you generate from Instagram. This is what we call value for your time.

Watch the video on to have a better understanding before we proceed. What are cryptocurrencies

Using Cryptocurrencies To Liberate Africa.

KuBitX a well-known pan African technology organisation set itself on a journey to leverage on blockchain technology and bring the cryptocurrency experience to the African users. KuBitX aims at opening up doorways for the people in Africa to access mobile banking and at the same time to transact freely across the globe without any form of friction. KuBitX native token (KuBitCoin) and is available for all those who can access a mobile device to use and transact value amongst each other in Africa and around the globe.

Watch the video on Getting To Understand KuBitX

How do cryptocurrencies work?

If you have used mobile money before sending and receiving of cryptocurrencies is no different. On what we call a wallet ( a digital purse used to store, send and receive digital tokens) you will find features such as send, receive, wallet address and memos or messages. To receive digital currencies one has to provide the sender with your wallet address (a long code of numbers and letters), and a memo, tag or message if required. It is important to include the memo, tag or message if it is asked for. It is also advisable to ensure that you provide the sender with the specific wallet address asked so as not to lose your funds.

You must have done a lot of reading thus far, here is a video tutorial that will make things a little bit easier for you understanding how cryptocurrencies work.

Watch the video on How do cryptocurrencies work

So here is an example, Mary in South Africa wants to send $3000 in KuBitcoin (KBX) to John in Rwanda. KBX is an alternative token (alt), the native token of the KuBitX platform.

The diagram below is an illustration of how Cryptocurrencies work.

Step 1: Mary runs to a KBX kiosk or exchange where she purchases and pre-funds her wallet with $3000 worth of KBX tokens. The math is simple,

Mary”s capital ($3000) divided by KuBitX average price ( $0.3) = 10,000 KBX

Now Mary has 10,000 KBX tokens which are equivalent to $3000 in her KuBitX wallet. To send John KBX tokens she will have to request John to send her his wallet address which is a long code of numbers and letters. Now that John has sent the wallet address Mary navigates to the send option in her wallet and inputs the required information such as the amount she wishes to send and the wallet to which she is sending to. On confirming that everything is correct Mary clicks on send, provides her password and authorizes the transaction. The amount she sent is automatically debited from her wallet and cannot be spent twice.

Step 2: The transaction only takes a second or half, it is super fast, let us see what happened behind the scenes.

Once Mary clicked send, the transaction was represented as a block of information online and was broadcasted to every party or node on the Stellar network which KBX is based on.

The nodes on the network come to a consensus and all approve that the transaction is valid, this is known as confirmation which only takes a millisecond. With some cryptocurrencies it might take up to 30 mins maximum.

Step 3: After confirmation that the transaction or block is valid, it is then added and recorded on an online public ledger that keeps a record of all transactions that happens with KBX. The open public ledger is an immutable and secure network known as blockchain. Blockchain being open makes it possible for anyone to view a transaction. John can always verify if Mary sent the KBX tokens and Mary can always confirm that John received the tokens.

Step 4: Within a few seconds 10,000 KuBitX tokens are credited to Johns wallet from Mary’s wallet. John has received $3000 in KuBitX. John can now use KuBitX to pay for a meal or pay his bills. Cryptocurrencies eliminate certain constraints such as geometrical boundaries, time wastage or transaction fees. On the open ledger you John, Mary or any other individual will be able to view the wallet address from which the money was sent from and to, the time of confirmation and the amount transacted. The credentials of the individuals are never revealed.

With the KuBitX hybrid over the counter wallet you will be able to send say Nigerian Naira from Nigeria to Kenya where the recipient will receive the funds in Kenya shillings. KuBitX aspires to promote Pan-African trade and support the growth of African businesses to grow and spread across Africa and the globe.

You must have come across the term Blockchain a couple of times, we did not want to get so deep into it, but guess what? On our next topic, we will get to understand what this Blockchain is and how it works. Amazing right?

Now that you had a good time learning and discovering new terms lets see if you can remember some of the terms used by answering 5 easy questions.

  1. Which among the below is not a cryptocurrency?
  • Bitcoin (₿)
  • Ethereum
  • Dollar
  • KuBitcoin

2. What is the name given to the open ledger that records cryptocurrency

Transactions?

  • Blockchain.
  • Bitcoin
  • System
  • Node

3. Who was the founder of Bitcoin?

  • Bill Gates
  • Nelson Mandela
  • Satoshi Nakamoto
  • Government

4. What is the Greek work of hidden?

  • Kruptos
  • Crypto
  • Encode
  • Code

5. What is the name of the first Pan African crypto exchange?

  • Binance
  • Bittrex
  • KuBitX
  • LocalBitcoins

Until next time see you. By Brian Adams @KuBitX

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KuBitX is a cryptocurrency trading platform focused on education, inclusion and adoption.

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