Cryptocurrency Explained – Is a digitally operated currency which is encrypted using many styles to manage the production of units of digital cash. The transfers of Cryptocurrencies are detached from a single bank. Get Cryptocurrency Explained in full here!
Cryptocurrency Transactions are the safest, fast and free as they are completed on a Blockchain. Learn about the best CryptoCurrency Investments, plus, learn about Cryptocurrencies on the Rise.
What is cryptocurrency?
This introduction explains the most important matters about cryptocurrency and blockchain technology.
After reading this, you know more about cryptocurrency than most other people.
Cryptocurrency Explained - In 2008, the financial crisis gained momentum after the major American bank Lehman Brothers went bankrupt. As a result, people, businesses, and governments worldwide ran the risk of losing their property held with the bank. Shortly thereafter, an unknown person or with the alias Satoshi Nakamoto published a document called "Bitcoin: A Peer-to-Peer Electronic Cash System". In it, Satoshi explains his invention, Bitcoin: a decentralized (P2P) digital network for mutual payments without the intervention of a third party, such as a bank or government.
At first, Bitcoin was not even intended as a digital currency, but as a watertight system to send money directly from one party to another without the intervention of a financial institution. Cryptocurrency Explained - We will try to explain how such a decentralized system for digital money (cryptocurrency) works.
How does cryptocurrency work?
In order to be able to operate digital systems with which value can be transferred, at least the following is necessary:
A payment system can be set up on the basis of this information. What is most important to a payment system, however, after each transaction the balance on an account is updated so that the money can only be spent once!
Cryptocurrency Explained: All conventional digital payment systems, such as internet banking or PayPal, make use of a central authority that keeps track of this. Because there is, therefore, a central authority (servers / the bank) to keep track of, you are always dependent on a third party for storing assets and transferring value in a conventional payment system.
In a decentralized network (cryptocurrency), there is no question of a central authority or a third party. This means that each part of the network must independently keep track of all transactions and for each new transaction it must be able to verify whether it is a valid transaction and whether the balance to carry out the transaction is sufficient.
The payment system only works when all parts of the network have the same information. Normally this is fairly easy because this information can be verified at a central authority, but in a decentralized cryptocurrency network, this is not the case.
Nobody, therefore, believed that it would be possible to develop a decentralized digital payment system, but Satoshi Nakamoto proved the opposite. In the Bitcoin network based on blockchain technology, all parts of the network always have exactly the same information, so that this information does not need to be verified with a central authority.
Cryptocurrency in practice: what is it?
Just like with money in a bank account, digital currency ultimately turns into a number in a database that represents a certain value. Cryptocurrency Explained - For both currencies such as Euros or Dollars on a bank account, and cryptocurrencies such as Bitcoin / Ethereum / Litecoin / Monero / Bytecoin, this number cannot be adjusted by anyone unless certain conditions are met.
Cryptocurrencies can be used just like "normal" currency to make payments. Within the network of the relevant crypto coin, a payment will have to be confirmed by several parts of the network, after which the transaction is recorded in a general ledger. This ledger is called: the blockchain.
Characteristics of digital currency are:
Cryptocurrency is always usable for everyone. Because no third parties are involved in transactions, anyone with a digital wallet (wallet) can manage their own money and make payments with it. Cryptocurrency Explained - There is no bank that can go bankrupt, no cash machines are needed, there is no government that can intercept or withdraw money, and there are no high transaction costs and long waiting times for international transfers.
Payments are irreversible. Once a transaction has been confirmed, it cannot be reversed. By no one! After you have transferred cryptocurrency, nobody can change this.
Security guaranteed by cryptography. Funds and transactions are sent and stored encrypted. Encryption of this data is based on encryption with Publick Key Cryptography. Advanced cryptography makes the system unhackable, so your money is safe as long as you keep your wallet well.
Pseudonym or anonymous payment transactions
Both the account numbers and transactions of blockchain payment systems are not linked to your identity in the real world. What is visible depends on the crypto coin. For example: the Bitcoin and Litecoin blockchains show that there was a transaction, the value of the transaction and between which parties the transaction was, while cryptocurrency such as Monero and Bytecoin obfuscate this information.
Cryptocurrency Explained - Pay fast and internationally. Making a payment with cryptocurrency is easy and goes very fast. Moreover, transactions are not location-dependent: a payment in cryptocurrency can be received as quickly by your neighbor as by someone on the other side of the world. This will take a maximum of a few minutes.
Getting started with the blockchain: investing in cryptocurrency
Invest in cryptocurrency On Cryptostart.nl we write information about the most popular and interesting blockchain start-ups and technologies. Cryptocurrency Explained - Almost every blockchain technology has its "own" cryptographic token, read: a cryptocurrency. Cryptocurrencies can be obtained by mining, earning or buying them.
For most people who want to make money with blockchain, investing in cryptocurrencies is the most logical step: It simply means buying a cryptocurrency and reselling it after the cryptocoin has increased in value. To start trading in cryptocurrency, take the following steps:
Step 1: Choose one or more cryptocurrencies you want to invest in. View the most popular crypto coins on our website and research the currencies/technologies that interest you.
Step 2: After you have decided in which cryptomunt (s) you want to invest, you can create a cryptocurrency wallet or buy a hardware wallet for extra security.
Step 3: You can now purchase the desired cryptocurrencies. The easiest way is usually to buy Bitcoin first and then (partially) exchange it for altcoins if you want to invest here. An alternative is to register with a cryptocurrency exchange.
Step 4: You can now keep track of the price trend of your favorite cryptocurrencies via our Cryptocurrency page. Cryptocurrency Explained - Keep an eye on the market, but do not let yourself be influenced too much by short-term price fluctuations: selling panic is never a good idea and as long as you do not sell your cryptocurrencies, you do not lose.
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