Crypto Currency – What is cryptocurrency ?

What is cryptocurrency ?

Crypto Currency – digital money that is stored in user’s e-wallets.

It differs from other digital money in the high degree of encryption and anonymity.

TYPES OF CRYPTOCURRENCIES

Nowadays there are dozens of cryptocurrencies and new ones appear and disappear all the time.

Bitcoin was the very first cryptocurrency. It appeared in 2009 and is based on block chain, a chain of information blocks.

The alternative cryptocurrencies to Bitcoin are “Altcoins”. The best-known altcoins are Ethereum, Ripple, Tether,Litecoin, Dash, IOTA.

Litecoin, Dash, IOTA.

WHERE IS CRYPTOCURRENCY USED

Paying online with cryptocurrency is gaining in popularity. With it, you can buy a variety of goods, from pizza to jewellery and cars.

Bitcoins and other cryptocurrencies are quoted on financial markets and crypto exchanges. Investments are made and cryptos are traded on the crypto exchange.

How to get Bitcoin

↪️ Where to buy Bitcoin

↪️ Ways to get Bitcoin

You can get Bitcoin in one of two ways, buy it or earn it.

Bitcoin is traded the same as any other currency. It can be bought on the crypto exchanges and exchangers.

In some countries you can even buy Bitcoins at an ATM. ATMs such as Bitcoin Depot and Bitstop are popular in the USA.

Buying digital coins on special cryptocurrency exchanges can prove profitable. You can even earn more speculating on the difference in rates.

There are also several ways to earn cryptocurrency.

The first way is Bitcoin mining, using a computer.

The second way is to receive payment for work or services in the form of Bitcoins. Many Bitcoin owners pay for services on the Internet using cryptocurrency.

Where to store Bitcoin

↪️ What a Bitcoin wallet is

↪️ What the wallet temperature is

Bitcoins are not stored in your wallet or bank account. You need a special digital wallet for it.

A Bitcoin wallet is the place where the Bitcoin number and password are recorded.

TYPES OF WALLETS

Wallets are of two types, hot and cold.

Hot wallets are stored on the hard drive of a computer, in a mobile phone, on servers of cryptocurrency exchanges and special services.

Hot wallets are easy to use but require enhanced security measures.

If your key is on the Internet, it can be easily hacked.

The keys are printed out or kept on a USB drive.

The method of storing keys without internet access is called a cold wallet. Cryptocurrency replenishment and transfer takes longer, but security is tighter.

The keys are printed out or kept on a USB drive.

There is a special device called a hardware wallet where you can keep your key.

Cold wallets are used for the safe custody of Bitcoins. The danger of using a cold wallet is the loss of the paper or digital drive.

WHAT TYPE OF WALLETS TO USE?

Cold wallets are best for keeping large amounts of cryptocurrency.

Hot wallets are better and more convenient for paying online and trading.

Why is cryptocurrency well-known

↪️ Why everyone likes cryptocurrency

↪️ What its shortcomings are

The reasons for the popularity of cryptocurrency lie in its advantages over other types of money.

Anonymity

Cryptocurrency transfers are not controlled by banks.

Security

All transfers of cryptocurrency are encrypted so it is almost impossible to steal.

Versatility

Cryptocurrency is readily accepted, secure and independent. You can easily buy it to pay for online shopping.

Speed

Cryptocurrency transactions are quick. And though Bitcoin transactions can take some time, the transfer of new cryptocurrencies happens almost instantly.

Inflation independence

Bitcoin is not threatened by inflation as the number of coins is limited to 21 million units. This can be compared to gold where reserves are limited which is why Bitcoin is called “digital gold”.

You can’t just print out new Bitcoins as the government can do with cash. That is why Bitcoin is not affected by inflation.

SHORTCOMINGS OF CRYPTOCURRENCY

At the same time cryptocurrency has its disadvantages:

Lack of real value

Cryptocurrency is not backed by assets so there is a risk that the financial authorities may ban it.

Instability of the rate

The cost of cryptocurrency depends directly on demand and prices can vary significantly.

Connected to the wallet

Funds are no longer available if your wallet passwords are lost.

Of course, the last two points can hardly be called disadvantages. After all, hard currency exchange rates can also be unstable, and a lost wallet containing cash is unlikely to be returned.

How Bitcoin works: blockchain technology

✔ What the chain of blocks is

✔ How the blockchain works

HOW IS IT ALL ORGANIZED?

This technology is used to transfer and store information, as well as transact using cryptocurrency.

Blockchain means a chain of blocks.

WHAT THE BLOCK CONSISTS OF

Each block contains a unique label that defines its place in the chain.

The information in the block is encrypted so it is impossible to change the data.

HOW IS THE CHAIN FORMED?

The chain of blocks forms a single database. And new blocks are constantly added to it.

Each block refers to another which was created previously in the chain. Chains of data blocks are created and stored on a computer network.

The blocks are connected by common information and the same access rules.