What is a cryptocurrency? it is a digital or virtual currency designed to function as a medium of exchange. It uses cryptography to secure and verify transactions, as well as to control the creation of new units of a particular cryptocurrency.
Several attempts to create a digital currency were made during the tech boom of the 1990s, but they failed for many different reasons, including fraud, financial problems, and even friction between company employees and their bosses.
So, in early 2009, Bitcoin was introduced by an anonymous programmer or a group of programmers under an alias Satoshi Nakamoto. described as an ‘electronic cash system’. It is completely decentralized, which means there are no servers involved and no central control authority.
One of the biggest problems any payment network has to solve is double spending. It is a fraudulent technique of spending the same amount twice. The traditional solution was a trusted third party, a central server, that kept records of balances and transactions. However, this method was manipulable and another person was given control of their funds and with all their personal details at hand.
In a decentralized network like Bitcoin, each participant must do this job. This is done through the Blockchain, a public ledger of all transactions that occurred within the network, available to everyone. But it does not reveal anyone’s identity.
How to use a cryptocurrency
In the past, trying to find a merchant that accepts cryptocurrencies was extremely difficult. These days, however, the situation is completely different globally.
There are many merchants, both online and offline, that accept Bitcoin as a form of payment. They range from retailers to small local shops, bars and restaurants. Bitcoins can be used to pay for hotels, flights, jewelry, apps, computer parts, and even college.
Of course, non-Bitcoin crypto users can always exchange their coins for BTC. In addition, there are gift card sales websites like Gift Off, which accept around 20 different cryptocurrencies. Through gift cards, you can basically buy anything with a cryptocurrency.
How many cryptocurrencies exist?
Currently in the digital and global market you can find many cryptocurrencies, among which Bitcoin and others such as Ethereum always stand out. It is possible to find a large number of cryptocurrencies, this is because since the launch of Bitcoin (the first cryptocurrency) a wide variety of projects emerged, which later issued their own cryptocurrency.
According to the CoinMarketCap portal, the total estimate of known cryptocurrencies is 5,406. However, this amount is increasing daily, since various digital projects implement them to use them in multiple ways.
Despite the large number of cryptocurrencies that exist, the one that dominates the market is Bitcoin, since it was the first to be created and has one of the highest prices. Clearly, each of the cryptocurrencies offers its own qualities and advantages, so they are worth knowing about.
Investment in Cryptocurrencies
Many people believe that cryptocurrencies are the best investment opportunity currently available. In fact, there are many stories of people becoming millionaires through their Bitcoin investments.
However, it is worth noting that cryptocurrencies are high-risk investments. Its market value fluctuates like no other asset. In addition, it is partly unregulated, there is always a risk that they will be banned in certain jurisdictions and any cryptocurrency exchange can be hacked.
If you decide to invest in cryptocurrencies, Bitcoin obviously remains the dominant one. There are currently many options available, with some centralized currencies, others less open and decentralized like Bitcoin.
Where to buy cryptocurrencies
Colombia is one of the countries that consistently reports high volumes of bitcoin transactions, reaching up to 760 btc traded per day.
In addition, the search term Bitcoin has been showing a slight increase month by month as shown by the Google Trends platform, showing the interest that exists within the country in everything related to the ecosystem of the leading cryptocurrency.
If you want to acquire Cryptocurrencies you can do it through these options such as LocalCryptos (to buy ethereum), Local.Bitcoin.com (to buy Bitcoin Cash), buda (to exchange bitcoin, bitcoin cash, ether and litecoin) and if you want to buy Bitcoin the The best recommendation is Bixxus (a Colombian page that allows you to buy, sell and exchange bitcoins for cash or thousands of products), localbitcoins (a platform to buy and sell bitcoins) among others.
Legality of cryptocurrencies
As cryptocurrencies become more common, regulatory authorities around the world are trying to understand the very concept of cryptocurrencies and where exactly they fit into existing regulations and legal frameworks.
With the introduction of Bitcoin, a completely new paradigm was created. Self-sustaining decentralized digital currencies that do not exist in any physical form and are not controlled by any singular entity, were ultimately created to cause an uproar among regulators and shut down third parties.
Many concerns have been raised regarding the decentralized nature of cryptocurrencies and their ability to be used almost completely anonymously. Authorities around the world are concerned about the attractiveness of cryptocurrencies for traders of illegal goods and services.
Therefore, currently the use cases of cryptocurrencies in countries are where governments have not regulated the use of cryptocurrencies but also do not prohibit them, as is the case with most governments in the world.
Future of Cryptocurrencies
Some of the limitations that cryptocurrencies currently face, such as a hacker looting a virtual vault, may be overcome over time through technological advances. What will be harder to overcome is that the more popular they become, the more government regulation and scrutiny they will have.
Bitcoin has sparked a debate about its future and that of other cryptocurrencies. Despite the problems, its success since its launch in 2009 has inspired the creation of alternative cryptocurrencies such as Litecoin, Ripple, and MintChip. A cryptocurrency that aspires to be part of the conventional financial system would have to satisfy government entities. Although that possibility seems remote, the use of cryptocurrencies has been increasing, which also brings new obstacles in the countries, this will not stop their use and, on the contrary, makes them more attractive to ordinary people.
