Cryptocurrency is a type of internet exchange of money. It uses various cryptographic functions in order to make financial transactions. This way, cryptocurrencies gain transparency, immutability as well as decentralization.
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The most interesting fact about cryptocurrency is that no central authority controls it. Due to blockchains, it is not connected to the government’s control and interference. These cryptocurrencies can be sent from different parties directly since they all use private and public keys.
The transfer can be finished with almost no processing fees, which means people do not need to be charged by other financial institutions. These cryptocurrencies are a huge phenomenon and an important part of the global economic system.
What can you buy with cryptocurrencies?
You can buy cryptocurrency tokens or coins on the internet by using credit cards or even traditional money. It is a great way of holding or transferring cash online. There are lots of different cryptocurrencies you can check out online. Some of the most famous ones are Bitcoin or Ethereum.
What is their value?
The value of these cryptocurrencies can change over time, and it usually depends on supply and demand. You can find a fixed amount of some currencies that are always available, but if more people want to use that specific currency, the price of it grows. For example, the price of Bitcoin once changed from $20,000 around $4,000.
How are these currencies used?
Purchasing cryptocurrencies is quite simple, but unloading them can be a trouble sometimes. Some websites allow you to buy a variety of digital coins. You can also download apps that work as digital wallets where you can keep your coins or send them to others easily. In this case, your private keys are kept in your device.
If the user wants to send currencies, all that has to be done is quite similar to traditional online services. They just insert the amount they want to be sent and the name of the company which receives it.
There are some vendors who allow you to use cryptocurrencies, such as Microsoft. With these currencies, you can buy various things, even estates. Many companies put certain restrictions and limitations when it comes to their use.
You should be aware that there are hidden fees. They are mostly a certain percentage of your total deposit or the payment. However, those are still way cheaper than in other services.
Are they safe?
These cryptocurrencies have a special blockchain technology which means transactions are recorded and very safe. This system is hard to hack and is controlled by multiple nodes.
If a token is stolen from your digital wallet, there are almost no chances of you getting your money back. For example, more than $1 billion worth of cryptocurrencies were stolen the previous year.
What are ICOs?
Initial coin offerings (ICOs) is one of the ways companies use when they want to raise money. It is done by issuing virtual tokens.