Cryptocurrency is a very trendy topic at the moment, as many people have jumped on cryptocurrencies heralding them as the future and a great investment that offers fast and effective returns. If you don’t know that much about cryptocurrencies then you might be a little overwhelmed by the sheer amount of talk on the topic. This guide is here to help by showing you all you need to know about cryptocurrencies.
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What Is A Cryptocurrency?
In the most basic terms, a cryptocurrency is a digital asset. A cryptocurrency is a digital, encrypted and decentralized form of exchange. That means that unlike, say the Euro, there is no central authority, that is in charge of managing and maintaining the value of a cryptocurrency, instead, the value is determined by the demand and other market forces.
What Is A Blockchain?
A blockchain is a distributed database that stores information digitally. Blockchains are essential for making cryptocurrency systems secure and enabling decentralized records systems. Blockchain differs from a typical database in that it collects information and stores it together in “blocks.” These blocks have a certain storage capacity, when this is filled the block is closed and linked to a chain of other data blocks, hence the name, blockchain.
Types Of Cryptocurrency
There are many different types of cryptocurrencies, some of the most well-known cryptocurrencies are listed below.
Bitcoin was the first cryptocurrency that was first realised in 2009. Bitcoin operates using a blockchain which allows an anonymous digital exchange.
Ethereum has grown in popularity over recent years and has become the major competitor to Bitcoin. While both Bitcoin and Ethereum use open source and are distributed by blockchain, Ethereum uses a different programming language, with some other additional features.
Doge Coin is the meme of cryptocurrencies, in fact, the currency was almost worthless until Elon Musk tweeted about it. Since then, Dogecoin has become an internet sweetheart and the value has shot up massively.
Tether is a stable coin, which means that it ties its value to a fiat currency, for Tether it is the U.S. dollar. Tether is the largest stable coin on the market.
What Are The Uses Of Cryptocurrencies?
Something that many people struggle with when it comes to cryptocurrencies is what they can actually be used for. While cryptocurrencies cannot be used like standard currencies, that does not mean they are utterly useless. The primary reason why people invest in cryptocurrencies is to make money, essentially, they are used as a form of investment. However, cryptocurrencies are also commonly used to make secure online transitions. As freeextrachips.com explains many online casinos are taking cryptocurrencies.
Where Can You Purchase Cryptocurrencies?
Cryptocurrencies can be bought through crypto exchanges, some of the most popular exchanges are Coinbase, Kraken and Gemini. Buying, exchanging and selling cryptocurrencies used to be quite challenging but popular exchanges have now made the process very simple. However, before choosing one exchange to use it is worth checking to make sure that they support your intended transitions, as some exchanges do not support all forms of crypto pairing.