What Is Cryptocurrency

What Is Cryptocurrency?

Feb 15, 2023

At Alkimi we are using cryptocurrency within our ad exchange to increase efficiency and transparency for our users.

Cryptocurrency can seem very technical on first impression but we are here to show you that it doesn’t need to be. It’s possible that you already know a lot more about it than you think!

Expect to learn:

  • The origins of the word ‘cryptocurrency’

  • How cryptography was used in World War 2

  • What a cryptocurrency is

Let’s tackle the question that no one can seem to answer simply.

So, what is cryptocurrency?

The word ‘cryptocurrency’ is actually two words merged into one. Let’s break those down individually.

Crypto’ refers to a process called cryptography. Simply put, cryptography is the study of secure communication.

The whole idea behind cryptography comes from wanting to send a message to someone that only they can open and read. You use cryptography to encrypt and decrypt messages.

Essentially, it gives you the ability to communicate privately with someone when you’re not in the same place. Cryptography can also be used to cover your identity.

In order to encrypt and decrypt a message you use an encryption algorithm, otherwise known as a cipher (a cipher is an algorithm).

In World War 2, ciphers were used as part of military communication. A British scientist named Alan Turing famously decrypted the cipher that the German military used.

By deciphering the cipher, Turing gained access to the radio communication of the German military and ultimately helped to save countless lives. This moment in history was made into the film The Imitation Game.

If you have seen The Imitation Game you will remember something called the ‘enigma’. The ‘enigma’ was the name given to the German’s ciphering machine, it is what they used to encrypt and decrypt messages.

Turing constructed a machine called ‘bombe’ to decrypt the cryptographic messages of the enigma. In the film, they changed the name from bombe to Christopher.

So, just to reiterate. Cryptography is the study of secure communication. A cipher is what is used to encrypt and decrypt messages.

Currency’ is something that people are happy to exchange with one another as a means of payment.

Over the course of human history, we have used many different forms of currency. Precious shells were once a currency, as was gold.

In recent times we have used a government-issued currency called ‘fiat currency’. And our newest form of currency is called cryptocurrency.

Now that we know what cryptography is, what a cipher is, and what currency is. We can see how they have combined to become cryptocurrency.

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