What is Cryptocurrency?
Last modified: 19 May 2018
Your capital may be at risk. This material is not investment advice.
Cryptocurrencies have been a hot topic for the last few years. Businesses, governments and the general public from any part of the world are always eager to debate over cryptocurrencies. Some are saying it is a different form of currency and some have a view that it holds value like dollars and euros. Most people have heard the word cryptocurrency but not all know what exactly it is.
This article is aimed to remove the confusion about cryptocurrencies and after reading it, you will be able to understand the basics of cryptocurrencies, how you can get them, and what advantages they hold.
Cryptocurrency is a kind of virtual or digital currency which allows you to make online purchases. Unlike the conventional currencies, cryptocurrency is online based and is not controlled or backed by any governments and banks. It is decentralized and maintained through a digital network instead of a company or single person. A digital wallet is used to store the money owned by you which you can keep offline on your PC or in a cloud. If you want to transfer this currency to someone else, you can easily do it with the help of a mobile device or a computer. The record of every transaction is present in blockchain and it is available publicly to all the currency holders.
How to Get Cryptocurrencies?
One way to get cryptocurrencies is through mining. It is performed with computers, where a complex math puzzle (hash) is required to be solved. People from all over the world compete to get the hash solution at the earliest and the winner is awarded the specific amount of mined cryptocurrency. This process requires special hardware which is capable to run round-the-clock.
Mining is not the only method of getting cryptocurrency. The simplest method is to purchase them through an online marketplace. Here, you will also be allowed to sell them whenever you wish. You can use your domestic currency to purchase them, just like you purchase gold and stocks. Cryptocurrency’s value is influenced by the demand and supply and keeps fluctuating every time.
Advantages of Cryptocurrencies
The prime advantage of cryptocurrencies is anonymity. Although every transaction is digitally recorded and publicly displayed, no one is required to share their personal information like the complete name or address while receiving and sending payments.
The business done with cryptocurrencies has a benefit of being economical. Although little fees may apply, it is insignificant and very less than that charged by different financial institutions and banks. Moreover, physical currencies can be counterfeited but cryptocurrencies can’t be faked.
The Biggest Cryptocurrency
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.
The world’s most famous and biggest cryptocurrency is Bitcoin having a global user base of millions. It came into existence in 2009 by someone having a nickname Satoshi Nakamoto. It is the world’s biggest but not the only one. There are more than 1,000 different cryptocurrencies but only a few of them are good for trading. Some other big names are Ethereum, Bitcoin Cash, Ripple, Bitcoin Gold, Dash, Litecoin, IOTA, Ethereum Classic, and Monero.