Simply put, cryptocurrency is digital money, designed securely and anonymously in some cases. It is closely associated with the Internet making use of cryptography, which is basically a process where readable information becomes code that cannot be broken so that it can address all transfers and purchases made.
Cryptography has a history dating back to World War II, when there was a need to communicate in the most secure way. Since then, it has evolved and digitized today, where different elements of computer science and mathematical theory are used to ensure online communications, money and information.
The first cryptocurrency
The first cryptocurrency was introduced in 2009 and is still well known around the world. Since then, many more cryptocurrencies have been introduced in recent years and today you can find so many available on the Internet.
How they work
This type of digital currency makes use of decentralized technology to allow different users to make secure payments and also store money without necessarily using a name or even going through a financial institution. They are mainly executed in a chain of blocks. A blockchain is a general ledger that is distributed publicly.
Cryptocurrency units are usually created through a process known as mining. This usually involves the use of a computer. Doing it this way solves the math problems that can be very complicated in coin generation. Users can only buy coins from brokers and then store them in cryptocurrencies where they can spend them very easily.
Cryptocurrencies and the application of blockchain technology are still in their infancy when it comes to financial terms. More uses may arise in the future, as it is not known what will be invented more. The future of the transaction in stocks, bonds and other types of financial assets could be traded very well using cryptocurrency and blockchain technology in the future.
Why use cryptocurrency?
One of the main features of these coins is the fact that they are secure and offer a level of anonymity that you may not get anywhere else. There is no way to reverse or falsify a transaction. This is by far the main reason why you should consider using them.
The fees charged for this type of currency are also quite low and this makes it a very reliable option compared to the conventional currency. Because they are decentralized in nature, anyone can access them, unlike banks, where accounts are only opened through authorization.
Cryptocurrency markets offer a new format of cash and sometimes the profits can be excellent. You may make a very small investment only to find that it has become something fantastic in a very short period of time. However, it is still important to keep in mind that the market can also be volatile and that there are risks associated with buying.