A few years ago, few people heard about cryptocurrency. Gradually, people began to learn more about it and it is now one of the most discussed topics in the world. But, despite the popularity of such virtual money, some people do not know what cryptocurrency is, how it works, why it is needed, what types of cryptocurrency exist, whether it has disadvantages, what can be bought for such a currency, etc.. In this article about Elgreloo.com, we will give you detailed information about cryptocurrency and you will be able to understand this issue.
What is cryptocurrency?
Cryptocurrency is a type of digital currency that is protected by cryptographic technologies. This money has no physical equivalent and exists only in the virtual space. The unit of measurement of this system is the “coin”. The term “cryptocurrency” itself came into use after the publication of an article about bitcoin.
Digital currency is issued in different ways, namely:
- ICO (initial coin offering);
- Mining (maintenance of a platform for creating crypto currency);
- Forging (the formation of new blocks in existing cryptocurrencies).
That is, it must be concluded that cryptocurrency comes from the Internet. It should be noted that their difference from ordinary money lies in the decentralization of the issue. The stake of this money is the generation of a mathematical code followed by an electronic signature.
Types of cryptocurrencies
Digital currency first appeared in 2008, and there are already several thousand varieties of it. Almost 50% of crypto money that is not supported by any content. In another way, they are called “soap bubbles”. The most common types of cryptocurrency are:
- Bitcoin BTC (1 bitcoin = $ 14000 (11.01.2018));
- Ethereum ETH (1 Ethereum = $ 1177 (01/11/2018));
- Litecoin LTC (1 litecoin = $ 228 (01/11/2018));
- Zi-cash ZEC (1 Z-cash = $ 677 (11.01.2018));
- Dash DASH (1 dash = 1040 USD (11.01.2018) );
- Ripple XRP (1ripple = 1,80 USD (01/11/2018)).
The most popular cryptocurrency is Bitcoin. The name consists of two words “bit” – the smallest unit of information and “coin” – which means “coin” in English. For him, not only a program was created, but also a special digital wallet in which this currency can be stored. Today, there are already ATMs in which you can transfer bitcoins to ordinary money. Some stores accept this currency for settlement.
Why is cryptocurrency needed?
A large number of people go abroad every year. Some for relaxation, some for business. When a person plans a trip, he always carefully thinks about the financial side of the trip, namely: draws up a budget, converts ordinary money into currency, transfers certain funds to the card. Unfortunately, no one is safe from scammers, and during the trip everyone can come across them.
You will have to spend almost all your time restoring blocked cards, looking for friends who could borrow money. All this can be avoided by keeping the money in the cryptographically protected digital currency. In addition, the popularity of virtual money is growing, and a large number of stores already accept them for payment.
Cryptocurrency: pros and cons
In terms of main characteristics, digital currency is different from conventional currency. Cryptocurrency is becoming more and more popular every day. And this is not fortuitous, because it has a large number of positive aspects:
- Anyone can get this kind of money through mining. And all because there is no single emission center and organs that would control this process.
- All transactions are conducted anonymously. The only open information is the e-wallet number.
- There is a release limit for each currency type. Therefore, there is no inflation in relation to this money.
- Cryptocurrency is protected by a special code like an electronic signature. It cannot be copied, and therefore it cannot be counterfeit either.
- When carrying out monetary transactions, the commission is not charged, since there is no third party – the bank.
- Availability of money anytime, anywhere. Wherever you are, you can always control your digital currency, check the validity of transactions.
As you may have noted, cryptocurrency has many advantages. But despite this, such a digital currency has drawbacks, namely:
- In the event that the user lost the password to his electronic wallet, he lost all the funds that were in it.
- Cryptocurrency prices change very often and quickly.
- The process of mining cryptocurrencies is becoming more complicated, and mining with the help of special equipment of individual users is becoming less and less profitable.
How to make money on cryptocurrency
Most believe that cryptocurrency exists only to protect their money or to pay with that money in some stores. Few people know that you can make money with cryptocurrency. In this section on Elgreloo.com, we will tell you all the ways to make money on cryptocurrency.
Buying and selling cryptocurrency. This is done on special exchanges or exchangers. The essence of such earnings is to buy coins during a decrease in their value and sell them during an increase.
Investment. Transfer of electronic money from one person to another’s trust.
Cloud mining. You do not need to buy additional more powerful equipment for this. And all because there are services on which to sell and buy computing power.
Cryptocurrency distribution. This service is provided in order to attract referrals.
From the above, we can conclude that cryptocurrency is a new word in the circulation of money. It was born in connection with the needs of the modern world. Even if the cryptocurrency has no real expression, it is already possible to pay with it in many stores around the world. Cryptocurrency has a large number of advantages, and therefore is gaining popularity in the modern information space every year.