What is cryptocurrency, how does it work and why do we use it?

cryptocurrency

Cryptocurrency is a form triple mine company of digital money that is designed to provide security and, in many cases, anonymity.

It is an Internet-related currency that uses cryptography, the process of converting readable information into almost unbreakable code to track purchases and transfers.

Cryptography was born out of the need for secure communication during World War II. It has become a digital age with elements of mathematical and computer theory to become a means of protecting communications, information and money on the Internet.

The first cryptocurrency was Bitcoin, which was created in 2009 and is still the most famous. In the last decade, there has been a rapid increase in the number of cryptocurrencies and there are now over 1,000 on the internet. Bitcoin rose to $ 20,000 at the end of last year and then fell back to $ 6,000.

Here’s everything you need to know about cryptocurrencies.

How do cryptocurrencies work?

Cryptocurrencies use a decentralized technology that allows users to make secure payments and hold money without having to register or go to a bank. They operate on a distributed public registry called the blockchain, which is a record of all transactions updated and made by currency holders.

What are the most common cryptocurrencies?

Bitcoin: Bitcoin was by far and by far the most traded cryptocurrency. The coin was developed by Satoshi Nakamoto in 2009, the mysterious figure who developed his blockchain. As of May 2018, its market capitalization was approximately $ 128 billion.

Ethereum: Developed in 2015, Ether is a currency token used on the Ethereum blockchain, the second most popular and valuable cryptocurrency. As of May 2018, Ether’s market capitalization has been approximately $ 56 billion. However, the ether went through a stormy road. After a major hack in 2016, it split into two currencies, while its value at one stage reached $ 1,300, but earlier it briefly dropped to 10 cents. In 2017, it proved to be extremely popular as a launch pad for other cryptocurrencies that use the Ethereum blockchain code.

Ripple: Ripple is another distributed registry system founded in 2012. Ripple can be used to track multiple transactions, not just cryptocurrencies. The company behind this has worked with banks and financial institutions, including Santander. Its market capitalization is about $ 24 billion.

Litecoin: This currency is most similar in shape to Bitcoin, but has moved faster to develop new innovations, including faster payments and processes that allow for the processing of many more transactions. The total value of all Litecoins is about $ 6 billion.

Why use cryptocurrency?

Cryptocurrencies are known for their security and provide a certain level of anonymity. They cannot be changed or canceled and generally have low fees, which makes them more reliable than the regular currency. Their decentralized nature means that they are accessible to everyone, although it is difficult to install and few stores accept them.

As a new form of cash, it is known that cryptocurrency markets will suddenly grow, which means that a small investment can turn into a large amount in the shortest time.

This has led to an increase in the number of professional and amateur speculators investing in bitcoin and other cryptocurrencies, viewing them either as a quick way to make a profit or as part of an investment portfolio.

But the same thing works differently. People who want to invest in cryptocurrencies should be aware of market volatility and the risks they take when buying. They have fallen significantly several times, which could cost investors millions of euros.

Due to the level of anonymity they offer, cryptocurrencies are often associated with illegal activities, especially on the dark web. Users should pay attention to the connotations when buying currency.

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