What You Need to Know About Cyptocurrencies
Cryptocurrencies are increasingly becoming a global phenomenon in the 21st century. This crash introduction will explain all you need to know about cryptocurrencies. A cryptocurrency is digital currency that is used to make any kind of payments of any value without incurring fees.
A cryptocurrency runs on blockchain technology. Simply put, blockchains are decentralized ledgers just like any spreadsheet, that accept inputs from various parties. Details in these ledgers can only be changed only when there is a consensus among the group. This makes the transactions within the ledgers highly secure and it also means that third parties such as banks, are not required to approve the transactions. Blockchain is a hot topic right now and you can hear news about blockchain very often these days.
Cyptocurrency units are generated from a process known as mining. This process involves the use of computers with high computational power that solve complex math problems to generate coins. The generated coins can then be bought from coin brokers, stored and spent through the use of cryptographic wallets. The applications and usage of cryptocurrecny and blockchain technology are quite promising and more uses are to be expected. For example, bonds, stocks and other financial assets transactions could eventually be made using this technology.
The most common forms of cryptocurrencies include Bitcoin, Ethereum, Ripple and Litecoin. Bitcoin was the first cryptocurrency developed in 2009, and is the most commonly traded. As of July 2017, it has a market capitalization of about $45 billion. Ethereum was developed in 2015. It is the second most popular of the cryptocurrencies. It has a market capitalization of around $18 billion as of July 2017. Ripple was established in 2012. However this cryptocurrency can be used in tracking different kinds of transactions besides cryptocurrency. It has a market capitalization of around $6.3 billion and has been used by banks such as Santander and UBS. Finally, Litecoin is a cryptocurrency that has been linked to new innovations including fast payments and transactions. It has a market capitalization of $2.1 billion.
There are two major ways of acquiring a cryptocurrency, one is purchasing a highly expensive, and energy-consuming supercomputer and use it to mine a particular cryptocurrency. This I do not personally recommend for obvious reasons. The other alternative is to buy the cryptocurrency itself. This can be done from a number of user-friendly websites for example Coinbase and Poloneix just to mention a few. But I highly recommend going over some reviews before making a choice.
These are some of the steps one has to go through before buying a cryptocurrency. First, set up a cryptocurrency wallet. This is where you store your cryptocurrency. This can be done by installing a mobile app or registering for a wallet online. Second, securing your account. Many online wallets come with a series of security measures that you take to ensure the security of your cryptocurrency. You have to note some important aspects such as your wallet ID and other security measures. After securing your wallet, the next step is to find a broker. You can choose your appropriate broker from online platforms where you send cash to the broker and in turn you receive some cryptocurrency in your wallet. The fourth step is to buy. Finally the fifth step is to sell or spend. You can use the same broker to sell your cryptocurrency or decide to purchase anything you want as long as they accept cryptocurrencies as form of payment.
Once you have enough knowledge about cryptocurrency, you might consider using it for online purchase or use it for investment. Recently Initial Coin Offering (ICO) has become a hot topic and you might have heard about this term and you can find many new startups from ICO lists. Make sure you understand those companies very well before buying their tokens. Cryptocurrency is a revolutionary. It has also made many people rich. However, spending time to understand it is the very important first step.