Understanding Cryptocurrencies For Newbies
I am guessing you probably have heard about the Cryptocurrencies hype, right? Possibly through a friend, a work colleague, a business partner or maybe seen the craze on the Internet. Well, Cryptocurrencies have and are continuously becoming a global phenomenon. However, you may not really know what they are and what you can do with them.
If you have no idea what these are, you need to read on, this article will explain and change all that. We're going to take you through the nitty-gritties of Cryptocurrencies. Nothing technical, just the basic information you need to know with regard to Cryptocurrencies, how they work, their value and what they're trying to accomplish.
So, let's get started.
What Exactly Are Cryptocurrencies?
In the most basic terms, Cryptocurrencies are digital currencies. What this means is that they are intangible, and therefore do not exist physically. It also means that you cannot pick and put them in your hand or wallet like you do with normal currencies. They are created as open source software and exist on the internet virtually.
Have you heard of Bitcoin? Bitcoin was the first cryptocurrency to be invented. It was created in 2009 by a group or a person by the alias name ‘Satoshi Nakamoto’. Since then, hundreds of other different Cryptocurrencies have been designed, created and are in existence today including Bitcoin Cash, Ripple, Ethereum, Litecoin, Sky coin, Monero and more.
How Do Cryptocurrencies Work?
Cryptocurrencies are created using a technology known as blockchain which records and allows peer to peer digital transfers. As such, blockchain technology is a public digital ledger where all cryptocurrency transactions are stored. You can think of blockchain technology as the underlying infrastructure of digital coins. The system is decentralized which means there’s no central governing authority such as in banks or middlemen financial services providers.
For instance, if you obtain Bitcoin Cash, use some to buy or pay for a service, or even sell, all those transactions will be recorded in a secure fashion in the public ledger.
What Can You Do with Cryptocurrencies?
Although they don’t exist physically, Cryptocurrencies are very valuable and their worth is increasing by the day. You can use them to buy goods or pay for services over the internet. Additionally, you can use them to invest. If you want to exchange one cryptocurrency to another, you can do that. You can also exchange them for fiat currencies. Cryptocurrencies are also being used for Initial coin offerings (ICOs) projects. Such projects allow investors to take part in crowd funding ideas and projects for startups.
Today, Bitcoin (BTC) is the most valuable cryptocurrency. However, Bitcoin comes with some flaws such as the fact that it is very slow as a result of a limited block size. That is where Bitcoin Cash (BCH) comes in. Bitcoin Cash is an alternative to Bitcoin with a larger block size and fast transactions for users. By market cap, it is currently between the second and third most valuable cryptocurrency in the world.