Tag: cryptex • BookLikes

text 2021-11-11 16:06

What are cryptocurrencies and what are they used for?

In recent years the buying and selling of cryptocurrencies has become popular. More and more traders and savers invest their money in them. But, in particular, what are cryptocurrencies and what are they for?

To answer the question what cryptocurrencies are, we must talk about bitcoin, a very named asset. Cryptocurrencies or cryptocurrencies are digital currencies that are exchanged online. Unlike money, they do not have their material representation so they are stored in digital wallets.

Differences with paper money

Cryptocurrencies, what is it and how does it work? These are recurring questions today, given the great importance that the famous digital currency Bitcoin has gained in recent years. Since its diffusion, other options have appeared at different prices.

Without regulation: The most important aspect to highlight when explaining what cryptocurrencies are is that, with any of the more than 8,000 versions that exist, in no case do banks intervene. The commercial transaction is carried out between two people, without the regulation of a financial institution.

It is the biggest difference with traditional money. Generally, the currency of each country is regulated by the national bank from which it is issued. For example, the Argentine peso is regulated by the Central Bank or the euro by the European Central Bank.

No country intervention: As digital currencies do not depend on a country's authorities, neither do national economies affect their value. For the variation of its price, differences between digital supply and demand intervene.

Cryptocurrency market: what are they for?

Fast payments: In the cryptocurrency market anyone can buy the digital money on the platforms that sell them, such as Libertex, and then they can make quick payments to avoid transaction fees.

Buy products online: At the moment not all companies have the possibility of carrying out commercial exchanges with cryptocurrencies open. However, given the growth and demand of recent years more and more companies have added this service. For trading crypto please read about Cryptex Exchange

Investments in CFDs: It is related to the price of cryptocurrencies. People invest their money in the cryptocurrency market to make a profit.

CFDs, contract for difference, are contracts where you trade on the difference in the price of a cryptocurrency between the moment you open a position and the time you close. They are called contracts for difference, because derivative products allow you to invest in different currency markets without acquiring the underlying assets.

Most popular cryptocurrencies

The most well-known, quoted and popular cryptocurrencies are Bitcoin, Litecoin, Ethereum and Ripple, among others. Their prices are constantly changing, so investors should be attentive to the charts to know the right time of the investment.

Bitcoin is the first cryptocurrency launched in 2009. Its value varies, but the second week of September 2021 its price was around 44,371.25 dollars per unit. On the other hand, Litecoin stood near $172.3, Ethereum $3,171 and Ripple or XRP at $1,037.

Details and disadvantages

An important detail to keep in mind, which can be both an advantage and a disadvantage, is that in the absence of a banking intervention there is also no financial backing. This means that in the event of any type of inconvenience there are no refunds or refunds.

The operation cannot be cancelled because the cryptocurrency wallet or blockchain does not enable the data to be erased. Therefore, if a person wants to reverse the transaction he will have to take the opposite action.

Trading cryptocurrencies has the advantage of not paying commission, but at the same time there is a certain degree of unprotection. Likewise, cryptocurrencies are here to stay. Every day more people join and buy them in a world where banknotes are less used while transactions with digital wallets grow.

But what is the basis of cryptocurrency mining?

To give you a quick idea, in the world of cryptocurrency, money is not created, but discovered. This process is called mining. Like all mining, there are miners who get rewards (cryptocurrency) from time to time.

Now we will explain the working principle of cryptocurrency mining in a few simple steps:

Cryptocurrency users have been sending virtual currency.
The transactions made using cryptocurrency are recorded in the blockchain, which is more widely known as

Miners confirm and record these transactions. In return, they will receive a small commission as compensation. As you can see, working in a virtual mine is very different!

This is the procedure followed by miners in cryptocurrency mining. If you want to mine Ethereum, you must build a powerful computer to serve the network. As a result, the prices of components such as graphics cards have skyrocketed.

Now that you understand the subject, at some point you may want to invest in digital currency or become one of these miners. No matter what happens, remember that you can become the currency of the future.

But how does cryptocurrency work?

How can I buy and sell them without the need for an intermediary-as described in my BBVA digital guide? Why are we talking about money or digital assets when we talk about cryptocurrencies?

According to its operation experts, each cryptocurrency has its own algorithm and is responsible for accurately managing the number of new units issued each year. In turn, they use cryptographic encryption, in addition to protecting their ownership, but also protecting transactions, making it impossible to copy virtual currencies stored in digital wallets.

However, if you decide to engage in the trading of cryptocurrencies, you should also understand two other basic concepts in the field of digital assets: “blockchain” and “exchange.”

More information | How and where to invest my money The network that cryptocurrency runs on is called “blockchain” or “blockchain” and it stores all the changes that occur in transactions

“Blockchain” or “blockchain” is the network on which cryptocurrency runs and stores all the changes that occur in its transactions, so it acts as a kind of “ledger”, which is public and accessible.

Although the “exchange” is a platform that allows transactions with cryptocurrencies and acts as an “exchange market” because you can buy, sell or trade cryptocurrencies there in exchange for local currency, in our case it is for the sole.

Specifically, in the Peruvian market, some of the platforms or “exchanges” that allow you to buy, sell or trade cryptocurrencies are Buda.com, eToro, BTC Agent, Cryptex.