Simply put, cryptocurrency is digital money that is designed to be secure and anonymous in some cases. It is closely linked to the Internet, which uses cryptography, which is basically a process in which legible information is converted into code that cannot be hacked to save all transfers and purchases made.
Cryptography has a history dating back to World War II, when the need for the most secure communication arose. Since then, the same evolution has taken place, which today has become digital, where various elements of computer science and mathematical theory are used to provide communication, money and information on the Internet.
The first cryptocurrency
The very first cryptocurrency was introduced in 2009 and is still well known around the world. Since then, many other cryptocurrencies have been introduced over the last few years, and today you can find so many available online.
How they work
This type of digital currency uses decentralized technology that allows different users to make secure payments as well as save money without using a name and without even going through a financial institution. They mostly work on a blockchain. Blockchain is a public book that is distributed in the public domain.
Cryptocurrency units are usually created using a process called mining. This usually involves the use of computer power. By doing so, mathematical problems are solved, which can be very complex when creating coins. Users are only allowed to purchase currencies from brokers and then store them in cryptographic wallets where they can spend them with great ease.
Cryptocurrencies and the application of blockchain technology are still under development when viewed from a financial perspective. More new uses may appear in the future, as it is unknown what else will be invented. Future transactions with stocks, bonds and other types of financial assets in the future may well be sold using cryptocurrency and blockchain technology.
Why use cryptocurrency?
One of the main features of these currencies is the fact that they are safe and that they offer a level of anonymity that you will not be able to get anywhere else. There is no way a transaction can be canceled or forged. This is definitely the biggest reason why you should consider using them.
Fees for this type of currency are also quite low and this makes it a very reliable option compared to a regular currency. Because they are decentralized by nature, they can be accessed by anyone, unlike banks, where accounts are opened only with permission.
Cryptocurrency markets offer a whole new form of cash, and sometimes the benefits can be great. You can make very small investments only by finding that they grow into something big in a very short period of time. However, it is still important to note that the market can also be volatile and there are risks associated with buying.