A brief explanation about cryptocurrencies
With the development of new technologies, it is very common to hear about terms that are gaining relevance in the financial sector, such is the case of cryptocurrencies, a new way of handling money digitally. Through this note we explain the basic questions you should know about this topic. One thing for sure, anyone who doesn’t want to be out of date needs to learn all about cryptocurrency.
Cryptocurrencies are virtual currencies that use digital encryption for their operations and with which economic transactions can be carried out without the need to go through a bank or financial institution as an intermediary to verify their authenticity; hence its great popularity.
One of the main differences that these types of electronic currencies have compared to conventional currency is that they are only on the web and can only be used digitally. That is, you cannot carry cryptocurrencies in your wallet, but you can on your cell phone.
The project of making this type of coins arose in 2009 by a person (or group) who called himself Satoshi Nakamoto and was born to establish a disruptive technology in global commercial exchange where, regardless of the country of origin, transactions could be carried out easily and transparently.
Another aspect that makes cryptocurrencies very popular is that they can be used to buy anonymously; Although each transaction of this type of currency remains in a public record, the names of the buyers and sellers are not revealed, only their wallet identifications. While this keeps user transactions private, it can also lead to illegal activity transactions. However, and according to a study conducted by Stanford University, it was revealed that in the case of Bitcoin (a type of cryptocurrency) only 1% of transactions are used for this purpose.
What is the future?
The future of this digital currency is still very uncertain, although the truth is that it will be a topic that we will hear more and more and hence the importance of understanding the context in which it is being developed. Currently, the main problem they face is the lack of its regulation, which is why various nations have focused attention on this aspect.
The types of cryptocurrencies
Bitcoin was getting into everyone’s mind, controlling more than 90% of the cryptocurrency market. Here are some popular cryptocurrencies:
Bitcoin
Ripple
Litecoin
Ethereum
NEO
Monero
Dash
IOTA / MIOTA
NEM
Cardano
In the case of Bitcoin, these are some of its characteristics:
A pioneer since its creation in 2008, it has positioned itself as a leader in the digital market, accounting for 45% of the value of the entire cryptocurrency market.
This digital currency has a network that has access to the record of transactions, called Blockchain (chain of blocks), so each transaction is communicated to the entire network and therefore cannot be duplicated, making it a single and traceable unit.
Bitcoin wallets have a secret fragment called a “private key”, used to sign transactions, providing mathematical proof that the transaction is made by the owner of the wallet.
Transactions are certified through people connected to this network, which are called “miners”.
We know that any topic related to digital seems to change with just a blink, since it is estimated that its openness broadens the possibility of creating new cryptocurrencies; It is calculated that 2 are being created on average per day. Its risk and use today operate clearly in a speculative market, that is, supply and demand govern its value. Knowing its use and applications will make you become aware and participate, joining the wave of the necessary international regulations and thus participating in a reliable way in this that is already beginning to have more and more interference in the world economy.