- The blockchain is a distributed database of records of all transactions or digital events that have been executed and shared among participating parties.
- The only way to avoid scams is to ensure that more and more people are well-educated on cryptocurrencies
Cryptocurrency has been a buzzword globally for the past 15 years or so. To some, it sounds like wild jargon while conservative ones dismiss it as a fairytale.
However, this digital marvel is creating thousands of millionaires day and night, offering job opportunities to millions of young people regardless of social economic status.
The Star Newspaper's Victor Amadala sat with Binance's George Mwakisha, a crypto expert to digest the topic.
What are Bitcoin, Blockchain, and Cryptocurrencies?
Bitcoin was the first cryptocurrency, announced in 2008 (and launched in 2009). It provides users with the ability to send and receive digital money (bitcoins or BTC).
What makes it so attractive is that it can’t be censored, funds can’t be spent more than once, and transactions can be made at any time, from anywhere. For example, there can only ever be 21 million bitcoins in circulation.
The blockchain is a distributed database of records of all transactions or digital events that have been executed and shared among participating parties.
It contains every single record of each transaction and there is no central authority holding all the data.
Blockchain technology first came to light when a person or group of individuals named ‘Satoshi Nakamoto’ published a white paper on “Bitcoin: A peer-to-peer electronic cash system” in 2008.
A cryptocurrency can be described as a currency stored on a blockchain. Like other mediums of exchange, the value of a cryptocurrency is typically determined by the demand and supply as well as scarcity in the market.
Unlike fiat currency, however, they do not exist in physical form and are not issued by a central authority. Because cryptocurrency is digital, it can be sent to friends and family anywhere in the world.
What is the difference between Cryptocurrencies and normal currencies (FIAT)
FIAT Currencies or Normal currencies usually are issued by a central body and are controlled by governments eg KES is issued by the Central Bank Of Kenya and is under the Kenyan government.
For crypto, there are no central authorities / no intermediaries, which means they are borderless and there is no barrier to entry. They are digital currencies issued on a blockchain and are completely decentralized. Cryptocurrencies also have a Limited Supply for example - Bitcoin will ever have 21 million bitcoins
What is a Crypto Exchange?
A crypto exchange is a digital marketplace where people can buy and sell cryptocurrencies for other assets, such as conventional fiat money or other digital currencies.
What is Binance?
Binance is the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider with a financial product suite that includes a crypto exchange (the largest by volume).
What that means is that in addition to being a crypto exchange, Binance builds core facets of the blockchain ecosystem and contributes to wider industry infrastructure development. Other products include NFT marketplace, Binance live, Binance Earn, Binance P2P, etc
How does Cryptocurrency help Kenyans and Africans at large?
Remittances, cross-border transfers and settlements are some of the biggest use cases for crypto as it innovates the way Africans make payments.
The world is more connected than ever as people and businesses now operate across country lines.
Current traditional banking can be limited in terms of how long transactions take, how much it costs and the difficulties of exchanging currencies.
Crypto simplifies all these, making it easier for people to make payments in a fraction of the time.
Through cryptocurrency, users are also generating income and storing value to hedge against currency devaluation (for example through a stablecoin which is a type of cryptocurrency whose value is tied to an outside asset, such as the U.S. dollar or gold, to stabilize the price.
Say I want to Buy Bitcoin or Ethereum, How does one buy on Binance?
First, ensure you have a binance.com Account and that the account is verified then you can be able to buy your crypto Via Peer to Peer or P2P on Binance.
P2P is a way of transacting among two parties, one being a seller and the other a buyer and both of them need to have an account with Binance, where Binance will act as an escrow between the trading parties.
Binance ensures safety and user protection by providing 24-hour customer support and in case there is a dispute between the parties, it will be resolved easily through our dispute resolution mechanism.
For new users on Binance, it's important to have users trade with verified merchants who have gone through a thorough User Verification Process by Binance. Binance P2P Verified Merchants can be identified with a yellow tick next to their nickname.
What are NFTs NFTs
(Non-Fungible Tokens) are cryptographic tokens on a blockchain that represent a “one-of-a-kind” asset. These assets may exist in either the real world or the digital world.
NFTs allow holders not only to prove their authenticity but also the provenance of the underlying asset. Their existence allows for the introduction of the concept of scarcity in the digital world.
What are some of the risks associated with Cryptocurrencies
Crypto is a very volatile market but the volatility can pose an opportunity for traders who can take advantage of the market and make some income in the process. But it's usually very important for one to do their research before indulging in crypto trading.
There are also stablecoins which are cryptocurrencies pegged to the value of fiat such as dollars. These include USDT, and BUSD among others and It gives you the accessibility advantages of digital currency while also being stable.
Sometimes, people try to take advantage of the lack of knowledge when newbies enter the space. This is why we’re big on education and ensuring people have access to the right information.
Let's talk about Crypto Scams and how we identify and avoid scams.
Cryptocurrencies are quite new and in any new industry, there will be some rogue players who will want to take advantage of users who don't have an understanding of how things work.
The only way to avoid scams is to ensure that more and more people are well-educated on cryptocurrencies and Binance is at the forefront of ensuring Users are well-educated and protected before investing in cryptocurrencies.
Would you like to say something about Central Bank Digital Currencies and why they are important?
Central Bank Digital Currencies are Digital Currencies that are issued by the Central Bank and intended to serve as legal tender for that particular jurisdiction.
What is your advice to someone who wants to get started on Crypto?
What is the first thing they should focus on? - Education The first thing anyone who wants to get started on crypto needs to focus on is education.
Binance has an academy Binance Academy which is free access to all and has over 300 articles for anyone who wants to learn anything about the technology, from Bitcoin, Cryptocurrencies, NFTs and even trading.
The articles therein are simplified for a 5-year-old to understand.
Finally, is crypto the future, or it's a fad Crypto is here to stay?
The technology behind crypto assets which is Blockchain is revolutionary and thus opens opportunities for young entrepreneurs to access global marketplaces to sell their creativity globally in many other forms including NFTs.
Developers can now build solutions for the global or local market and have people across the globe participate in their solutions without any barriers.