Post by shikharani00188 on Oct 26, 2024 22:54:12 GMT -5
Bitcoins and cryptocurrencies have been words on many of our lips for several years, but in the pockets of very few. If you are interested in investing in cryptocurrencies, which we are sure you are, we present the first steps necessary as a guide , before investing in cryptocurrencies.
Becoming a miner or a stockbroker is just a click away. You choose whether to earn money passively, make investments with risk and reward, or simply learn about the subject and talk to your friends about it.
Shall we begin? Let's go!
Table of contents
What are cryptocurrencies?
How Cryptocurrencies Work
Why are cryptocurrencies worth money?
How to get cryptocurrencies
On web pages
Through mining
Doing trading
What are cryptocurrencies?
A cryptocurrency is a digital currency that, through virtual phone number service the use of a cryptographic system of algorithms, does not depend on regulation by private or public entities, such as banks or governments, for its exchange between users or for the purchase of goods or services.
But before we go any further, let's get things straight. Bitcoins are a type of cryptocurrency, just like euros, dollars, pesos or yen. There are many types of cryptocurrencies (Ethereum, Monero, Ripple, Iota, etc.) that make up the current cryptocurrency ecosystem, each with its own characteristics and value.
These currencies are not controlled by entities, and their value, although we will explain this later, is based on the trust of users in these same cryptocurrencies. In this way, it is the “blockchain” technology that makes it possible for these cryptocurrencies to have value, since they cannot be invented out of nothing; there must be a record of the profits, losses and, ultimately, the exchanges between users .
But let's not get ahead of ourselves, although if you already know all this and want to delve deeper into how to invest in cryptocurrencies, we recommend going to the end of our guide .
Read also: Sell more with your ecommerce ?
How Cryptocurrencies Work
Cryptocurrencies are just records in a database that no one can change without meeting specific conditions. To change our bank balance, the condition is to deposit or withdraw money, i.e. “ Person gives money to Bank , or Bank gives money to person” and it is the bank’s computer system that credits this transaction, which converts electronic data into money and vice versa.
Cryptocurrencies work in a similar way, the condition for exchanging the balance between two people or entities is that apart from exchanging the balance by each signing as a user of their account, this transaction has to be confirmed by third parties.
In this way, when “A gives money to B” both sign the transaction with their public and private keys, but since there are no official bodies involved, the validation of this exchange is known by the entire network of users of this cryptocurrency and is validated. When the transaction is confirmed, it is already fixed and immutable, as if it were a bank record.
Miners are responsible for confirming transactions. Their job is to identify transactions, credit them, and distribute them across the network so that they can continue to be recorded. When a transaction is confirmed, the nodes of that cryptocurrency add it to their database and it becomes part of that global record known as the “ blockchain .”
As a reward for performing this validation, miners take small amounts of cryptocurrency, which is one of the main ways of generating income, among many others.
How Cryptocurrencies Work