The first cryptocurrencies invented was Bitcoin which was launched in 2009. Back then it wasn’t as popular and used by many criminals to do payment for drugs or transfers that the police shouldn’t track. Today it’s one of the most popular currencies to invest in. In a lot of countries stores have started to offer to receive payments in Bitcoin. However, there are still challenges, for example it requires a lot of energy to run the blockchain system, some cryptocurrencies aren’t climate friendly at all.
What are cryptocurrencies?
Cryptocurrencies are digital currencies secured with cryptography, which are used to confirm transactions, check previous currency reserves and encrypt user accounts. Cryptocurrencies are often called “coins” or “tokens” but exist only digitally and not as physical coins, although they are often depicted as such. They can be exchanged or speculated against like any traditional currency, but they exist outside the control of financial institutions and governments. Cryptocurrencies can be bought and sold via exchanges and stored in digital “wallets”, from which they can be used for payment and sent to other people’s or companies’ wallets. The transactions are guaranteed and documented using blockchain technology.
What is blockchain?
Blockchain technology is the basis of cryptocurrencies, and it gives cryptocurrencies many advantages. The main advantages of cryptocurrencies are reliability, security and fast transfers.
Blockchain technology makes it possible to create and maintain distributed and shared databases, so-called “ledgers”. On the blockchain’s ledger, all transactions in a given cryptocurrency are recorded. So instead of your deposit being documented by a bank, it is the blockchain that records your holdings of cryptocurrency.
Blockchain is decentralized. All information on a blockchain is distributed to millions of computers worldwide in a “peer-to-peer network”. In this way, the blockchain’s information is found on millions of computers worldwide and thus cannot be changed by a single user (or hacker) when something is written into a block.
How does the cryptocurrency market work?
The value of a cryptocurrency is determined solely by supply and demand. Most cryptocurrencies have historically been quite volatile and have not been backed by a central institution that controls the money supply.
There are thousands of different cryptocurrencies that have different characteristics. Some exist in limited quantities, while others are infinite. Bitcoin, for example, is limited to a maximum of 21 million of them.
When a user wants to send cryptocurrencies to another user, the units are sent to the user’s wallet. For the transaction to be considered completed, it must first be verified and added to the blockchain.
Where to invest in Crypto?
There are a lot of places to invest in Cryptocurrencies. You can google most of the places. One of the most popular ones are Crypto.com. Also, some of the traditional banks are offering the opportunity to invest in Crypto directly or in certificates.
Be aware that there has been a lot of fraud with false mails and websites for Crypto, so it’s better to invest in one of the large popular sites who have they security in order rather than using a site with special starting offers.
Most Popular Cryptocurrencies
Bitcoin (BTC) was launched as the first cryptocurrency in 2009. Over ten years later, bitcoin is still the largest in the market among thousands of other cryptocurrencies. The currency was created with the aim of enabling direct internet payments without involving intermediaries such as banks and other payment providers. Bitcoin is based on a technology called blockchain, which allows bitcoin to be a decentralized currency that is not under the control of any government or bank.
Ether (ETH) is the internal cryptocurrency used in the ethereum network. The Ethereum platform was created in 2015 to create decentralized collaborative applications (dApps). Ether is a token that can be used for transactions through this software. Like bitcoin, ether is part of an independent “peer-to-peer network” for financial services that is free from public transparency and interference. Like bitcoin, ether has risen sharply in value in a short period of time.
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