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Cryptocurrency: Everything you need to know

Cryptocurrency: Everything you need to know

In this article, we will gather all the information you need to understand cryptocurrencies and the crypto exchange process. We will go through different definitions, examples, features, benefits, investment opportunities, bitcoin history, blockchain definition, and more. The article has an informative purpose. Remember that trading cryptocurrencies carries risks and does not guarantee a secure profit.

What is a cryptocurrency? 

Cryptocurrencies are digital currencies that use cryptography to allow for secure, instant peer-to-peer transactions. They can also be seen as a sort of alternative to traditional government and central bank monetary policies.  

The first cryptocurrency was created in 2009 and the market capitalization of cryptocurrencies is now greater than that of some global banks. 

What is blockchain?

Blockchain is the technology behind cryto. It is a public, distributed ledger that records all transactions that have occurred on a cryptocurrency’s network.  

The blockchain enables the verification of digital transactions and is an automatically updated record of who owns what. 

What’s Bitcoin? The world’s most famous cryptocurrency

In October 2008, a paper was posted on the internet under the name Satoshi Nakamoto titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” In 2009 Bitcoin was launched as a decentralized currency to replace money controlled by banks.  

In 2010 Nakamoto handed over control of Bitcoin’s source code and domains to developers and users. The system is now managed by the Bitcoin Foundation, which oversees developments related to the cryptocurrency.

Cryptocurrency: Everything you need to know

The main features of Bitcoin

While banks are often associated with cumbersome transactions and many unnecessary administrative fees, cryptocurrencies can be found quickly online, and participation in exchange is extremely easy and public. Because the system is decentralized, anyone can engage in cryptocurrency trading. Here are some of the main features of crypto that make it unique: 

  • A decentralized system that is not controlled by a bank and is an alternative to conventional money 
  • 100% Digital  
  • Transparency & Public information about all transactions 
  • Open-source  
  • Fast transactions 

The history of cryptocurrency 

The cryptocurrency world was originally pioneered by Bitcoin, the first decentralized digital currency. The system was developed from an electronic payment system called Bitcoin and a peer-to-peer computer network with no central authority or banks.  

Why is crypto so popular?

The popularity of crypto is growing because it is easy to use, instantaneous and secure. You can easily exchange your cryptocurrency with altcoins. The main reasons for its growing popularity are low transaction fees, no geographic restrictions, and anonymity. 

What is cryptocurrency trading?  

Cryptocurrency trading can be described as a process of buying and selling cryptocurrencies for fiat currencies or other cryptocurrencies. The process is held 100% online and secured by verifying processes. It is also often referred to as “crypto trading” where you trade digital currencies that have their own market value, act as their own asset, and are not tied to any central bank.  

Crypto channels offer a way of investing in crypto coins without physically purchasing them on the market. 

Most of the time crypto trading is done via a trading platform. The platform helps you in setting up a crypto wallet. Your cryptocurrency wallet is used to securely store your currency (cryptocurrency) until you’re ready to buy or sell it. 

The crypto trading process itself can be performed under different conditions, which vary depending on the platform of your choice, the number of intermediaries in the transaction, the presence or absence of restrictions, fees or rules. 

With the growing number of cryptocurrency platforms, the process of crypto exchanges becoming easier and easier. Today, most platforms only require identity verification and a bank card. 

Cryptocurrency: Everything you need to know

Buying crypto: World’s most famous cryptocurrencies

There’s no right answer to the question “Which crypto should I buy and invest in 2021”. However, most people invest in the most popular cryptocurrencies out there such as: 

  • Bitcoin 
  • Ethereum 
  • Litecoin 
  • Ripple XRP 
  • Dogecoin 
  • Stellar 
  • Polkadot 

These cryptocurrencies have increased the value of tokens over time, and this has attracted a lot of investors in the past few years. The logic behind their popularity is that decentralized digital currencies use cryptographic security to prevent fraud and counterfeiting.  

 What does Blockchain do in Crypto? 

As you may know, most financial transactions can be difficult to trace, which is the reason why crypto uses a public ledger known as “blockchain”. Blockchain can be used to verify transactions in a transparent manner. It is mainly designed and developed as an alternative payment method because of its anonymity and reduction in fees. 

Most popular platforms for crypto trading  

There are many platforms you can use for trading cryptocurrency online. Some of the most popular ones include Binance, CoinbaseKrakenBitfinexBitstampPoloniex.

There are many people who trade cryptocurrencies for a living. These professional traders generally employ a mix of technical analysis and fundamentals analysis when timing their trades. What’s most important for investors is to have great financial literacy in order to make the best decisions in all scenarios. 

Cryptocurrency: Everything you need to know

 What is Crypto Mining?

Crypto mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions. This ledger of past transactions is called the Blockchain. The blockchain serves to confirm transactions to the rest of the network as having taken place. 

Crypto mining is neccesairy to confirm transactions to the rest of the network as having taken place. Crypto mining is also the mechanism used to introduce Bitcoins into the system: “Miners” are paid any transaction fees as well as a “subsidy” of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system. 

The first miner to successfully “mine” a new block is rewarded with a set amount of newly created bitcoins and transaction fees. 

Investing in Crypto: Is it worth it? 

Investing in crypto can be tricky to learn. There are several platforms that offer crypto trading, which can make the process more complicated than it needs to be. That’s why it’s important o have great financial literacy for investing and look at crypto as another way to make money. But be aware that crypto is a new financial phenomenon that can be very unstable and won’t skyrocket you in a matter of minutes. 

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