Cryptocurrency Contents: Definition of CryptocurrenciesWhat is Cryptocurrency?What are virtual currencies (Cryptocurrency) for?ComparingCryptocurrencies and Physical CurrencyHow do Cryptocurrencies work?List some of the main Cryptocurrencies:What isthe investment and trade with Cryptocurrencies?What risks do you have?What is Bitcoin?Bitcoin, the pioneerThe Use ofBitcoinsAdvantagesand disadvantages of Cryptocurrencies :Reference Definition of CryptocurrenciesThe Cryptocurrency or Digital Currency are virtual coins thatuse a digital encryption for their operations, and which can perform financialtransactions without intermediaries.
These digital currencies use cryptographyto create safer economies, with greater privacy and that do not respond to thecontrol of any country or institution, since they are totally decentralized. What is Cryptocurrency?The term”crypto-currency” came into use after the publication of an articletelling about Bitcoin – the digital currency and the paymentsystem. Bitcoin is the brainchild of Satoshi Nakamoto, but what kind ofperson or group of people is hidden behind this pseudonym, is still not knownfor certain. The concept of a decentralized payment system Nakamoto waspresented on October 31, 2008. Its main principles are: anonymity for allparticipants, protection from fraud and independence from controlling organizations.
The bitcoin networkconsists of interrelated transaction blocks. Each subsequent blockcontains information about the previous one, so you can build them into asingle chain and get information about all the transactions that have beencommitted before (but not about the owners of bitcoins). The process ofcreating new blocks is called mining. In order for a new block to appearon the network, it is necessary to generate a cryptographic signature forit. As a reward you get new bitcoin.
By the way, their issue is notan endless process. It is known in advance that no more than 21 millionbitocoins can be created.At first, it wasrelatively easy to create blocks, and the lone miners did it. Over time,the complexity grew, for mining required solid computing power, so the minersbegan to pool and produce new bitcoin by joint efforts.What are virtual currencies (Cryptocurrency) for?The Cryptocurrencies are a type of digital currency , so theyhave the same use as any other physical currency, but with the difference thatwe can not touch it.
With virtual currencies you can make payments betweenpeople and, in addition, there are already several companies that support thistype of currency, although it is true that it is not yet widespread. Somecompanies such as Destinia, Dell or Microsoft already allow purchases to bemade through their web pages with bitcoins, the most widespread digitalcurrency in the world. But not only it is possible to pay with Cryptocurrency in webpages, and some stores and physical stores that allow you to pay for yourpurchases with this type of coins are beginning to emerge .
This is stilldifficult to see, but who knows if in the near future we will pay for ourpurchases in stores with digital currencies. It should be noted that in orderto make payments with any type of Cryptocurrency it is necessary to have anaccount that contains them. Just as we have debit cards with euros, pounds ordollars, it is also possible to have cards with Bitcoins. As is the case in the forex market, there are many people whouse Cryptocurrency to make investments that will produce benefits in the future. Bitcoin, for example, has experienced strong increases in a very short time,increasing its value exponentially. There are several types of Cryptocurrenciesthat exist and people already speculate with their value, as many people dowith the stock market to earn money.ComparingCryptocurrencies and Physical CurrencyIfwe compare Cryptocurrencies with Physical or Real money, we can observe aseries of advantages:Decentralized: Cryptocurrency is not controlled by anyState, bank or financial institution.
Anonymous: Cryptocurrencies allow you to preserve yourprivacy when making transactions.International: Can be used in any country in the worldequally.Sure:Your coins belong only to you and can not be intervened by anyone.WithoutIntermediaries: Transactions are carried outdirectly from person to person.Faster: Transactions are much faster thantransactions through financial entities.
VoluntaryUse: Its use is voluntary and notimposed by force as with traditional coins. How do Cryptocurrencies work?As its name suggests, Cryptocurrencies use cryptographictechniques to safeguard the currency’s security , thus ensuring that thecurrency can not be falsified in any way. Each person has their cryptographickeys that are necessary to perform any type of operation. These currencies coins are managed through a database called Blockchainor chain of blocks, in which all the operations made by any user of thesevirtual currencies are permanently registered. In addition, to improve securityit is necessary that the currency community approve each operation, so thattransactions can not be duplicated, since if one transaction has been accepted,another transaction can not be accepted.
It is also necessary to have anelectronic wallet that allows you to store your digital coins. To understand it, we can explain it in a simpler way. Aperson owns 3 bitcoins, which is the currency most known and used, which onlybelong to him and which have some keys that allow him to carry out hisoperations. All the operations that you carry out, which you can pay forproducts and services, or make transfers, are registered in the database, butprivacy is respected, since no one can know what the name of the person behindthose bitcoins is. . This is why it is very important not to lose the keys thatallow us to manage virtual currencies, since we are likely to run out of money. There are many ways to get Bitcoins , some unthinkable forpeople who do not know the world of Cryptocurrency. Therefore, we recommend youto know how to get bitcoins and Cryptocurrencies for your electronic wallet.
InvestmentWhat isthe investment and trade with Cryptocurrencies?Emma Poposka, general manager of the cryptocurrencymanagement company BronTech , explains to the Australian edition of HuffPosthow different investment and trade are in regard to cryptocurrencies and theirgreat common point: that they are becoming more widespread all over the world. “The literal meaning of investing in cryptocurrencies,in simple terms, is to buy a certain number of cryptocurrencies and wait untiltheir value increases.” Trading with cryptocurrencies is similar totrading with traditional currencies (Forex): agents trade currencies via theInternet “, summarizes Emma Poposka. “People are starting to become more interested, twoyears ago, there were not many, but today many people have bitcoins or ether(the cryptocurrency of Ethereum), and these people exert a force of gravitythat will cause more people to join, but all this has only just begun. ” In other words: if you buy a cryptocurrency in the hope thatit will increase its value to obtain benefits when you sell it, you are aninvestor.
On the other hand, if you want to exchange cryptocurrencies (bitcoinsper ether, for example) in the hope of maintaining the highest possible valueaccording to market speculation (as it happens in the stock market), you are anagent and you are trading. What risks do you have?According to Lucy Cameron, chief research consultant of theAustralian R & D & i group Data61 , the main risk when it comes to investingin and trading in cryptocurrencies is the volatility of current markets. Nor should we forget the security risks that surround digitalwallets, as well as the fact that the value of cryptocurrencies can fluctuateenormously, with sudden spikes and drops, depending on a multitude of events ona global scale, according to Lucy. Cameron: “The market is highly volatile, and that’s the firstthing we have to take into account, there are a lot of risks.” In thepast, the main risk has been piracy, which has come to take control ofportfolios of users and There are usually periods of enormous volatility andsignificant depreciation of a country’s currency due to important events, forexample, with the Brexit, the pound went down a lot and Bitcoin experienced apeak. of value, “he warns. List some of the main Cryptocurrencies:Bitcoin: (BTC), born in January 2009, based on the proof-of-work protocol ,is the first Cryptocurrency for value, the first to be known in bulk, and to berecognized as a form of payment from various Internet sites, including those ofthe deep web .
Litecoin: (?), is the second largest virtualcurrency. Created in 2011 by an MIT graduate and a former Google engineer (Charlie Lee ), it is based on a global point-to-point payment network thatenables instant , near-zero cost payments anywhere in the world. Litecoin is aglobal and open source payment network that is completely decentralized andwithout central authorities. Also based on complex mathematical operations,Litecoin says it offers faster transaction confirmation times and improvedstorage efficiency over its main rival, Bitcoin.Dashcoin: (DSH), is a more secret version of Bitcoin. Although Bitcoins areanonymous when compared to traditional money, there is still a record of allthe transactions carried out in an accounting book (or “blockchain”)that can reveal a large amount of information. Dashcoin offers more anonymitybecause it works in a decentralized master code network that makes transactionsalmost impossible to follow.
Launched in January 2014, it was created anddeveloped by Evan Duffield under the name of Darkcoin, although it has changedits name.Peercoin: (PPC), (known tosome as PPCoin, Peer-to-Peer Coin) was created by software developers SunnyKing (pseudonym) and Scott Nadal. Available since August 2012, it was the firstdigital currency to introduce the Mintage Test to secure the network. Althoughit also uses the Proof of work (using hash), since the hash difficultyincreases over time, users are rewarded with coins with the mintage because, inthe long run, this will mean that the peercoin network will consume lessenergy.Dogecoin: (DOGE), waslaunched in December 2013. Created by Billy Markus and Jackson Palmer, it isbased on the Bitcoin protocol, but with modifications.
It ensures having a muchshorter coin creation time than other currencies and there is no limit to thedogecoin number that can be produced.Primecoin: (PPC), is analtcoin with a difference. Developed by Sunny King (who also developedpeercoin), his proof of work is based on prime numbers, which is different fromthe usual system used by most virtual currencies , based on the Bitcoinframework. It is the search for special long strings of prime numbers, whichare of great interest in mathematical research.What is Bitcoin?Bitcoin is the name of the first electronic money, The word “Bitcoin” isformed in English from “bit” – the minimum unit of information and”coin” is a coin. Following the rules of Anglo-Russian transcription, this term should be translated into Russian as “Bitcoin . ” Suchwriting uses the official site bitcoin.org , Bitcoin Wiki , Wikipedia ,TSBRFand other resources.
Until now, the widespread version of ” Bitcoin” came from the first translation of the wallet interface based on directtransliteration.Bitcoin is the most important currently on the online market.The celebrity of the cryptocurrency is mainly due to the ups and downs that itsvalue has had in recent times, reaching considerable figures, but in additionto its record is its reliability to make it appreciated by traders and not only.
This type of currency is an alternative to traditional currencies, mainlybecause it is only used online and is not controlled by central banks andgovernments, but only depends on the transactions that determine its value. Its operation takes place through a database distributedamong various computers on the network on which the various transactions arenoted, all verified and regularly updated. The network can therefore be definedas peer-to-peer as the torrent structure. Combined with the addresses of eachperson working with bitcoins, there are encrypted keys, so as to protect theinvestor and record the various transactions. There is also a personal passwordto protect access to the online account, called a wallet, in which the bitcoinsare kept.
The technology used is called blockchain precisely because maximumtransparency allows us to keep track of transactions without jeopardizingsecurity. The information on the exchanges are divided into blocks and areresolved, for the purpose of registration, with a procedure called mining. Toperform the task are people who explore the database obtaining a reward in theform of commission, which repays the calculations made.
The payment is madepartly with bitcoins and partly with traditional currencies. Bitcoin, the pioneerBitcoin is for many the first, and most famous digitalcurrency, and perhaps most people come to mind when we talk about virtualcurrencies. Fame has not come alone. Perhaps one of the main reasons for itssuccess is the fact that it has an accounting book of all the transactions thatare carried out and that are verified from the cryptographic point of view.This book, in addition, does not belong to a single organism or person, but ismaintained jointly by the users of the currency. The Bitcoin Foundationorganizes a large part of the activity around this currency. Another peculiarity of Bitcoin is that it was a pioneer inhaving a decentralized currency system, in which all its members are equal andwhere the currency is not issued per se, but rather advanced equipment is used,using equations based on difficult mathematics.
, they issue the currency. The Use ofBitcoinsSatoshi Nakamoto invented the most used Cryptocurrency in theonline market. It is not his real name, but a pseudonym because the author ofthe bitcoin wanted to remain anonymous, giving his creation to the world. Themany researches made by journalists led to Craig Steven Wright, who admitted tobeing the creator of Cryptocurrency. Beyond who gave the world a new productfor commercial exchanges in the digital world, what matters most is tounderstand its use.
First of all, we need to rely on secure websites that allowus to create wallets, ie virtual and protected portfolios in which to keepelectronic money. This is an account to be accessed with confidentialcredentials and to be matched with an address for transactions. It works like a”bank account”, the funds are deposited and send and receivebitcoins. For each payment made, however, commissions must be paid and thespeed of the operation depends on the verification carried out by the miners,those who carry out the mining. To buy Bitcoin and / or sell electronic moneyyou can easily refer to the many exchange present on the internet.
These arebrokerage services that allow you to take advantage of digital currencies foryour investments or for exchanges, obviously for a small fee. Advantagesand disadvantages of Cryptocurrencies: Benefitsof electronic currenciesCryptocurrencieshave a number of advantages that make many people in the world already usingthem.o The paymentsmade in Cryptocurrency are formalized instantly. In addition, there are nointermediaries. Transactions are made from one person to another.o Makingpayments using Cryptocurrencies is very simple.
All you have to do is scanthe QR code of the person who is going to make the payment and indicate thedesired amount, so it can be done from any mobile phone with Internet. Inaddition, they can be used from any country.o The taxesincluded in each transaction made in virtual currencies are minimal.
Inaddition, the fees to send money abroad are also minimal.o Thecrypto currencies are decentralized so that no country or institution canmanage to control them. Risks of CryptocurrencyIn spite of everything,we must bear in mind that there are a number of problems or problems related todigital currencies .
o It is necessary to haveInternet to access them. In the contract case, we can not take our money or manageit in any way.o To be able to generalizethe use, it is necessary that a particular currency be extended significantly.This is what happens, for example, with bitcoin, which is used by many peoplein the world. In the opposite case, there are many people with differentcurrencies, which generates difficulty for their assiduous handling.
o One of the threats of Cryptocurrencyis quantum computers that, although not yet on the market, present seriousrisks for this type of electronic currencies. The processing capacity of thesemachines is such that it threatens systems that use cryptography as a securitymethod.o The price is only fixed bythe law of supply and demand.
This can cause sharp increases in prices but alsolarge falls, unlike countries that have currency reserves to control that itdoes not fall.