A cryptocurrency is a digital 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.
In short, it is a type of digital exchange media that has been with us for more than a decade, but it has been in recent years when its fame has been growing.
There were many attempts to create a digital currency during the technology boom of the 1990s, with systems such as Flooz, Beenz and DigiCash appearing on the market, but ultimately failing. Among the reasons for their failures were fraud, financial problems and even friction between company employees and their bosses.
In early 2009, an anonymous programmer or group of programmers under the alias “Satoshi Nakamoto” presented Bitcoin, which was described as a ‘peer-to-peer electronic cash system. It was a completely decentralized system. That is, it had no servers involved and no central controlling authority.
After Bitcoin became known, more cryptocurrencies began to be created based on its technology, these are what we know as cryptocurrencies, some of them only remain as projects that never prosper, while others have been very successful and have shown great results for their participants.
Characteristics of cryptocurrencies
The value of each cryptocurrency is variable, and in recent times there has been a lot of speculation similar to that of stock assets. Therefore, there are many people who are creating portfolios to have a portfolio of cryptocurrencies, and try to buy and sell them later to make money.
They are quite volatile in their price as they can rise as well as fall sharply in value and end up losing money…
Each cryptocurrency has its own algorithm, which manages the amount of new units issued each year. The maximum number of units of each cryptocurrency also varies. This can also affect its value and performance.
How do cryptocurrencies work?
To understand how cryptocurrencies work, several basic concepts must also be understood. The first is that it is based on a decentralized computer network, which means that there are nodes spread around the world with copies of all transactions that have taken place.
The second concept is that of miners, people who are part of the nodes, and who have the incentive that every time new Bitcoins are generated they are distributed among those who are part of these nodes.
Another important concept is that of exchanges, which are companies that allow you to exchange currencies such as euros or dollars for Bitcoins to buy the cryptocurrency you want. When you get them, they are stored in ‘Wallets’, which are applications that allow you to store or exchange them.
What other cryptocurrencies are there?
After Bitcoin there are currently about 7343 cryptocurrencies, each with its own defined purpose, you can consult them on the Coinmarket Cap page where they are listed according to their growth, in this order near Bitcoin we find some that have been positioning themselves as robust and popular alternatives for years, such as Ethereum, Litecoin, and other similar ones.
In this list we find its basic characteristics such as the number of coins, the capitalization, the Exchange where it can be purchased, its website and the daily growth chart.
There are some companies and services that have also tried to create their own cryptocurrencies, but so far they do not seem to be achieving good results.
Users of cryptocurrencies other than Bitcoin can always exchange their coins for BTC. There are also websites selling gift cards or payment for products and services such as Bixxus, which accepts a few different cryptocurrencies. Through gift cards, you can basically buy anything with a cryptocurrency.
The views and opinions expressed herein are solely those of the author and not necessarily those of Bixxus. Your cryptocurrency investments involve risks and you should do your own research.