You may have heard of cryptocurrencies, especially after the rise they had in the last year. But do you know what they really are? Do you know, for example, what Bitcoin is?
Cryptocurrencies didn’t emerge recently, as many people imagine. Bitcoin, for example, was created in 2009, almost ten years ago. And that’s why it’s important to understand what a cryptocurrency is.
A cryptocurrency goes far beyond just a digital coin. In the same way as a physical currency, which has watermarks, serial numbers and other devices to guarantee its security and veracity; cryptocurrencies use cryptography and technology called blockchain to ensure the decentralized operation of online trading, meaning existing codes are difficult to break to ensure that transactions are performed in a secure environment. Let’s look at an example: because they are decentralized, the cryptocurrencies are not held by the company or entity that created the currency or the place where the coin is as happens with the banks, they are literally in the possession of the owner and can be transferred from one person to another, without bureaucracy or intermediaries (like banks), in what we call the peer-to-peer system.
The quotation of buying and selling happen anonymously. The cryptocurrency is stored in a wallet and managed on a personal computer, smartphone, or tablet.
Crytpocurrencies and blockchain
Its control system, blockchain, has a database that acts as a public record of all transactions performed. This database consists of databases of records and shared data, aiming as the main measure of security and decentralization. We can say that the control system is a sort of reason book, totally public and shared. The absence of third-party mediation creates a sense of trust in direct communication between the parties who are making a transaction with digital coins.
The logic of cryptocurrencies is the same as ordinary money. Its function is to allow transactions of purchase and sale of products or services. And the growth in demand for and use of cryptocurrencies has increased dramatically in recent years, precisely because cryptocurrencies have all that security involved in their dealings, fraud protection, low transaction fees (compared to current fees paid on credit or debit cards transactions) and for having the ease to make fast and secure national or international transactions!
So, don’t you think cryptocurrencies can start to be a part of your life? Need a wallet to sort your cryptocurrencies? Then click here and create your own now.
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