Cryptocurrencies, also known as virtual currency or cryptocurrencies, are digital money which means that there are no physical coins or bills, they use a cryptographic encryption to guarantee your ownership and secure transactions.
Thanks to cryptographic encryption, the creation of additional drives is avoided, which means that anyone else can be prevented from making copies; cryptocurrencies are stored in a digital wallet.
People could use cryptocurrencies to make payments quickly, many people acquire them as an investment, in the hope that if it rises in the future it will generate profits.
On the other hand, cryptocurrencies can also be purchased through credit cards; or as happens in many cases, through a process known as mining.
This investment model has attracted the attention of many people over the years, due to the fact that its market value has grown significantly.
Read on to learn more about cryptocurrencies and how they have become so popular over the years.
How do cryptocurrencies work today?
Cryptocurrencies have different types of characteristics that differentiate them from traditional systems, they are not regulated, much less controlled by any type of institution.
At the same time, they do not require any type of intermediary; a decentralized base is used to carry out this process, a shared registry to keep track of these transactions.
Regarding the operation of these digital currencies, it should be noted that once the transaction with cryptocurrencies is made, i.e. when buying or selling, it will not be possible to cancel the operation.
This is because the Blockchain is a registry that does not allow data to be deleted; in order to reverse a transaction it will be absolutely necessary to execute the opposite one.
Since cryptocurrencies are not available in physical form, one must resort to a digital wallet service for cryptocurrencies, which are not regulated in order to store them.
How many types of digital wallets for cryptocurrencies currently exist?
A Wallet or also called digital wallet, is defined as a type of software or application that makes it possible to store, send and receive any type of cryptocurrency.
Unlike a physical money wallet, what is actually stored in the wallet are the keys that give us the right to these cryptocurrencies, thus allowing us to operate with them.
So that you can understand, we only need to know the keys to be able to proceed to transfer the cryptocurrencies; in the case of being stolen or lost, the person will not be able to recover the cryptocurrencies.
There are two types of wallets or digital purses, these can be called cold or hot.
The difference that stands out between both types of wallets is that hot wallets are connected to the Internet, while cold wallets are not.
In hot wallets we can find web wallets, mobile wallets and desktop wallets.
Unlike cold wallets, we can find hardware wallets and paper moments; which is simply the printing of the private key on paper.
It is worth mentioning that these services are not regulated, let alone supervised.
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How is the exact value determined?
The value of the same cryptocurrencies can vary depending on supply, demand and the value of the users themselves; such value is formed by the absence of mechanisms that prevent their manipulation, as well as regulated securities markets.
There are many occasions in which prices are also formed without any public information to support it, for this reason it is always advisable to investigate before buying or selling any cryptocurrency.
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Mining cryptocurrencies What is the meaning of cryptocurrencies?
This point refers to the process that is necessary to validate the operations that are carried out through this type of assets, in the case of bitcoin cryptocurrencies; its mining is carried out in the validation and registration of transactions through blockchain.
There are many people who have started with the process of mining cryptocurrencies and have managed to obtain excellent profits; although this process is a bit long and you must be patient throughout the process.
Can new ones be created?
To venture into the activity of creating cryptocurrencies, it will be necessary to have knowledge about cryptography, or at least programming skills to be able to clone codes of another type of cryptocurrency.
Currently we can find a large number of cryptocurrencies, but none of them has as much recognition as Bitcoin and Etherum.