Last updated on April 17th, 2023 at 12:48 am
In the summer of 2019, there were about 1,800 types of cryptocurrencies in the world, with Bitcoin and Ethereum still being the most popular. However, promising new tokens continue to appear on the market.
What is a cryptocurrency and how is it used today?
Cryptocurrency is digital money, which has no fiat counterpart. Crypto differs from other electronic currencies in that it is protected and encrypted using special cryptographic algorithms. The main feature of the cryptocurrency is its decentralization, independence from a single control center.
Cryptocurrencies are a new type of digital money that has long come into use and is actively used in electronic payments.
What are the characteristics of such a digital currency?
Fiat money is made by certain authorities, and the systems of such currencies are controlled from a single center. Cryptocurrencies, on the other hand, rely on peer-to-peer networks, excluding the possibility of influencing the blockchain from one point.
Cryptocurrency does not exist in physical form, it is purely digital. Yes, the crypto can be exchanged for goods or other types of money (dollars, euros, etc.), but the digital currency itself only exists on the network.
Best crypto wallets 2020 are encrypted, the owners get access to them using special identifiers that have nothing to do with the person’s identity and real data. Information about transactions is publicly available, but the data is impersonal and does not lead to the owner of the cryptocurrency.
The price of a cryptocurrency is determined by the amount of work that needs to be done to mine tokens; the shortage and demand for coins can change this value. This pricing option is called a proof-of-work system. There is also a proof-of-stake option for coin verification.
Despite the completely digital nature of cryptocurrencies, you can buy ordinary material values for them, pay for services of EMR development, etc.
But besides the obvious and direct purpose of digital money, there are several other use cases for them.
There are cryptocurrencies on the market that provide maximum anonymity to whoever sends the payment. These include Monero, Zcash, and PIVX. Thanks to them, you can transfer large amounts without any problems and obstacles from banks, authorities.
Inexpensive Money Transfers
Cryptocurrency transactions are carried out directly, without the involvement of third parties, which means there are no large commission fees (which are charged by conventional payment systems). This allows you to make payments at a minimal cost, and most importantly – do it almost instantly.
A Way to Store Savings
It is almost impossible to freeze or block cryptocurrency accounts from the outside, so crypto today can be a good option to store savings. This is especially true for countries in which the economic situation is extremely unstable, and the confidence in banking systems is very low.
Earnings on Trading
The principle of making a profit is simple: trade on a special exchange, buy cheap, and sell more expensive on time. There are a lot of Telegram crypto groups that offer crypto predictions, you should know how they work if you know at least one Forex Telegram group 2020.
As you can see, cryptocurrency is not useless. It becomes more and more popular because of high volatility that makes crypto trading very profitable.
Anyway, many experts predict that its popularity is going to be higher and higher, that is why it is time to think about some savings.
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