What are cryptocurrencies?
Have you ever wondered what cryptocurrencies are all about?
Here’s a quick glimpse into the world of Bitcoin and ALtcoins.
The cryptocurrency is a digital currency that is traded like a conventional currency. The difference is that the cryptocurrency is beyond the control of financial institutions and governments. You can secure and verify transactions yourself, as well as create and control new units of the cryptocurrency. Essentially, cryptocurrencies are restricted entries in a database that no one can change unless certain conditions are met. Each platform on which cryptocurrency is handled is based on the absolute consensus of all participants regarding the legality of balances and transactions.
At the beginning of 2009, an anonymous programmer introduced – or a group of programmers – the virtual currency Bitcoin under the pseudonym Satoshi Nakamoto. Satoshi described it as a peer-to-peer system for electronic money, which in this context denotes a communication among equals. It is completely decentralized, meaning there are no servers and no central authorities that have control over your money and all your personal data. In a decentralized network like Bitcoin, every single participant has to take on this task themselves, which is done via the blockchain. This is a public ledger of all transactions that have taken place within the network and is available to everyone. Therefore, you can view the balance of each account on the network. Each transaction is a file consisting of the sender and recipient’s public keys, as well as the amount of payment.
In the past, it has been extremely difficult, if not impossible, to find a trader who accepts cryptocurrency. Today, however, the situation is completely different. From large online businesses to small establishments, bars and restaurants – Bitcoins can be used for hotels, flights, jewelry, apps, computer parts u. more be used.
Altcoins – the alternative coins
Following Bitcoin’s breakthrough, many other digital peer-to-peer currencies have sprung up to emulate that success. Despite some differences, many of the altcoins are built on Bitcoin’s framework, so most altcoins also offer efficient and favorable ways to conduct transactions on the internet. Altcoins can differ from bitcoin in many ways by having a different economic model, a different coin distribution or tighter data protection. In any case, they offer you an interesting alternative to the digital currency Bitcoin.