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The Basics of Crypto Currency: A Beginners Guide

The Basics of Crypto Currency: A Beginners Guide


Cryptocurrency has been a hot topic of discussion among the populace for quite some time. Many people are aware of the concept but few can actually explain what it is or how they work. While cryptocurrency is an exciting new technology, it is still in its infancy and confusion remains around how to use them with ease. In this post, I will describe what a cryptocurrency is and also give you a brief overview of the various cryptocurrencies that exist.


What are cryptocurrencies?


The first thing you should know is that cryptocurrencies are a form of digital currency. They’re designed to work as an alternative to our current system, which is what makes them so controversial. They have been around for about a decade and have only now started to make the mainstream news headlines. There are 1,000+ different types of cryptocurrencies out there including Bitcoin and Litecoin, but it's worth noting that some are more popular than others.


How do cryptocurrencies work?


Cryptocurrencies are digital currencies that use cryptography to secure the transactions of the currency and to control the creation of additional units. A cryptocurrency unit is a medium of exchange using cryptography to secure its transactions, to control the creation of new units, and to verify the transfer of assets. In the simplest terms, cryptocurrencies work like paper money but without a centralized organization behind them. It’s decentralized which means it doesn’t come from or go through any one institution.


The History of Cryptocurrencies


Bitcoin was the first and most well-known cryptocurrency. It is a peer-to-peer system of currency that is not controlled by any central authority. Cryptocurrencies are not backed or regulated by banks or governments, but instead run on a blockchain system. Blockchain technology is what makes cryptocurrencies secure as it ensures that all transactions are verified and safe.


Why should I use them?


Cryptocurrencies are becoming more and more popular with each passing day. The idea of being able to transfer money, or any item of value, between two individuals without having to go through a third party is an exciting prospect. This is made possible by the use of digital signatures which are created when transactions happen on the blockchain.


The basics of bitcoin.


Bitcoin is the most popular cryptocurrency at the moment, but it’s not the only one. There are thousands of different cryptocurrencies and altcoins in existence that each have their own unique features and purposes.


A bitcoin has a value determined by the market, like a stock or other transacted asset (such as gold). The bitcoin itself does not have any intrinsic value and is not backed by anything other than its exchange rate to traditional currencies; however, this can change with time as more people start using bitcoins for transactions.


You purchase bitcoins from sellers who create ads on exchanges (or ask you to email them directly), which are websites where people can post offers to buy or sell bitcoin. Like any investment, purchasing bitcoins carries risk--you should do your research before proceeding.


Get a cryptocurrency wallet


Purchase a cryptocurrency wallet. To store your cryptocurrency, you’ll need an internet connection as well as a device with an internet browser and access to a digital wallet.


The different types of cryptocurrencies


There are many different cryptocurrencies that exist. Some of the more popular ones include Bitcoin, Ethereum, Litecoin, Monero, and Ripple. Each cryptocurrency has their own set of features and focuses on different things. The most popular cryptocurrency for the moment is Bitcoin which is used for online purchases and transfers. It can also be used as a store of wealth because it isn't tied to any country or subject to any regulation making it an attractive investment option.


Another type of cryptocurrency is Ethereum which is a platform that allows people to run apps without the need for a third party but instead relies on code that runs in the blockchain itself. This code called smart contracts can be used to create apps with specific functions like decentralized exchanges or financial derivatives with no single point of failure.

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