Being able to carry out transactions at any time is one of the great benefits that the internet has provided us.And these advantages don’t stop there: even the payment method has had its influence.An example?Encrypted digital currencies.
New cryptocurrencies appear every day and also more investors interested in the gains that these assets can provide.Just like delivery, transportation and various other facilities, these digital currencies are also the result of technological evolution in the financial and investment area.Want to understand a little more about them? In this post, you will know what cryptocurrency is and what it is for.
What is cryptocurrency?
Essentially it is a digital currency that uses cryptography to keep itself secure.The system is similar to the serial numbers or stripes found on printed banknotes to prevent counterfeiting.In the case of cryptocurrencies, these codes are very complicated to be broken. Follow this content and find once and for all the answer to this and other questions.Also, learn all the steps you need to follow to make your first investment in this market.
How do cryptocurrencies work?
Blockchain, cryptography, cryptocurrency… we know that all of this can seem very confusing and that’s why we’ll explain it part by part, okay?
Let’s start with theblockchain, which is basically a database with all the transactions made with digital assets.That is, information such as the number of transactions and wallet balance are stored within this system.
Encryptionis linked tosecurity.Its function is to protect the data contained in the blockchain from hacker attacks and other fraud.That is why “crypto” is used before the word “currency”.
In addition, there iscryptocurrency mining.That is nothing more than a way to validate and include new transactions in a blockchain network.
To facilitate understanding, imagine a super powerful computer and through it a person (miner) performs various mathematical operations with the aim of creating new cryptocurrencies.In short, this is how mining happens.
Why use them?
They are like any other type of currency and can be used intransactionsfor goods and services.They do not suffer intervention from inflation and nowadays serve several sectors.In addition, the encryption system guarantees a lot of security in its operations with the use of public and private digital keys.To explain, let’s imagine that, at the time of trading, these coins are like blocks of information ratified by their owner.At that point, it uses a private key that matches your coin wallet.The encrypted information is sent to the network and is decrypted by an equivalent public key.The two work as perfect partners.This process provides data about the transaction, but it is almost impossible to break this encryption to, for example, steal coins, which guarantees total protection for users.
What are the main cryptocurrencies that we find on the market?
One of the great representatives of cryptocurrencies isBitcoin, however, there are others on the market.We have selected some for you.Check out!
Ethereum
Launched in 2015, it is actually the name of the system on which the Ether coin operates.It makes it possible to make payments pseudo-anonymously and also monitor transactions through the blockchain, a decentralized ledger.The negotiations do not involve financial institutions and, therefore, its users do not pay the fees commonly charged in these negotiations.It is quite safe and even allows the elaboration of automatic contracts executed in codes.
Litecoin
Created to be an alternative to Bitcoin, it is authored by a former Google employee, Charlie Lee.He oftenposts information about the currency on his Twitter.In May of this year, the currency was welcomed by Coinbase, one of the major digital currency exchanges, and had ahuge appreciation.
Zcash/Monero
The main point of both currencies is to provide privacy for their users.The big point is itsblockchains: while Zcash’s is partly public, Monero’s is closed.In practice, privacy is always guaranteed for Monero transactions and whenever the user wants to in Zcash.
EOS, Bancor and Ardor
Here, it’s just potential cryptocurrency projects.Bancor is a framework for creating digital tokens (electronic devices that create passwords).Ardor is a platform for creatingblockchainas a service, facilitating the creation of other tokens and solving some scalability issues.EOS is an option for Ethereum and was created with the intention of solving the scalability of the other platform.Despite not being launched yet, or at least not fully launched, these coins have separately managed a few billion inICOrounds .
How to invest and where to buy?
First, the interested party must obtain an account on platforms responsible for managing these currencies.Then define a payment method and generate a wallet.Dulyregistered, the investor has access to the quote and can carry out transactions.For this, he needs to transfer an amount in real value for the desired amount of coins.This portion comes in the form of digital tokens that symbolize cryptocurrencies.In Brazil, the platforms that allow these transfers areFoxbit, Bitcoin to you and Walltime.If you liked knowing what cryptocurrency is and want to learn more about how it works?We have a course explaining the technology that powers all these currencies, theBlockchain in Minutes.