_ This article is prepared so that beginners and/or people with little knowledge about cryptocurrencies have good information about them.
What are cryptocurrencies?
Cryptocurrencies are virtual currencies, with no physical equivalent, that use cryptography to secure transactions and payments and to control the creation of new monetary units.
How cryptocurrencies work and what they are used for
Cryptocurrencies are decentralized digital assets, as they are not controlled or backed by any central bank, and their exchanges do not require intermediaries. Control of cryptocurrency transactions depends on a decentralized database, usually a blockchain.
Cryptocurrencies are used as an alternative means of payment to legal tender and, more often, as an investment. But unlike other financial assets, cryptocurrencies are not subject to any specific regulation, are not backed by a public authority, and are not covered by any consumer protection mechanisms.
How many types of cryptocurrencies are there?
There are currently estimated to be over 9,000 cryptocurrencies on the market. The most popular are Bitcoin, Ethereum, Tether and Ripple.
What is Bitcoin?
Bitcoin is the first cryptocurrency to start trading (in 2009) and also the best known and most capitalized. Currently, a bitcoin is trading at around $23,000 on exchange platforms. On this platform, this cryptocurrency can be found as: $BTC
What is Ethereum?
Ethereum is an open source platform, which is used to run smart contracts. It is programmable, which means that developers can use it in the creation of decentralized applications. On this platform this cryptocurrency can be found as: $ETH
What is blockchain technology and how does it relate to cryptocurrencies?
Cryptocurrencies use blockchain technology to ensure the security and integrity of transactions, as well as to generate new cryptocurrency units.
Blockchain is a technology that organizes information into blocks, information that must be validated by all participants in the network and that, once recorded, is unalterable. It would be something like an indelible ledger shared between a network of thousands of interconnected computers. The characteristics of blockchain have helped the development of cryptocurrencies, since, by creating a shared record of all transactions and establishing a decentralized method of validation, the exchange of digital currencies is facilitated directly, without the need for intermediaries.
What is cryptocurrency mining and what does it consist of?
Cryptocurrency mining is the process of creating additional monetary units of a cryptocurrency. Cryptocurrency mining involves solving a mathematical problem posed by a network of agents called miners, using powerful computer equipment. Whoever solves the problem first receives a reward, which is new units of the cryptocurrency being mined.
What is a virtual wallet and what types are there?
A virtual wallet is a software used to store, send and receive bitcoins and other cryptocurrencies. It is the equivalent of a bank account in the world of cryptocurrencies. Virtual wallets are protected by an encryption system, so that only the owner can access them using a password or security pin.
In addition to virtual wallets in the form of software, there are physical or hardware wallets (similar to a credit card or a pen drive) in which cryptocurrencies can be stored; as well as paper wallets, which are nothing more than a paper printout of the private key.
Who determines the price of cryptocurrencies?
The price of cryptocurrencies is subject to fluctuations. Trading is usually done on exchange platforms similar to the currency market, and as in the currency market, the price of each cryptocurrency will rise or fall depending on supply and demand.
How can I check the real-time value of cryptocurrencies?
There are many websites that show real-time fluctuations in cryptocurrencies. You can check their current value and see how they have evolved over the last day, week, month, year or several years. Google itself offers a module with this data when you make a query about a cryptocurrency.
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