Cryptocurrency: what it is, why it is needed, pros and cons
A few years ago, few people heard about cryptocurrency. Gradually, people began to learn more about it and now it is one of the most discussed topics in the whole world. But, despite the popularity of such virtual money, some people do not know what cryptocurrency is, how it works, why it is needed, what types of cryptocurrency exist, whether it has disadvantages, what can be bought for such currency, etc. In this article on Elgreloo.com we will tell you detailed information about cryptocurrency and you will be able to understand this issue.
What is cryptocurrency?
Cryptocurrency is a type of digital currency that is protected by cryptographic technology. This money has no physical counterpart and it exists only in the virtual space. The unit of measurement in this system are considered “koin.” The term “cryptocurrency” itself came into use after the article about Bitcoin was published.
Digital money is issued in various ways, namely:
ICO (initial placement of coins);
Mining (maintaining a platform for creating crypto money);
Forging (the formation of new blocks in existing cryptocurrencies).
That is, it follows from this that a cryptocurrency arises from the Internet. It should be noted that their difference from ordinary money consists in the decentralization of output. The release of this money is the generation of a mathematical code followed by an electronic signature.
Types of cryptocurrency
Digital money first appeared in 2008, and today there are already several thousand varieties. Almost 50% of crypto-money, which is not provided with any content. Differently they are called “soap bubbles”. Here are the most common types of cryptocurrency:
Bitcoin BTC (1 Bitcoin = $ 14,000 (01/11/2018));
Ethereum ETH (1 ethereum = $ 1177 (Jan 11, 2017));
Lightcoin LTC (1 lightcoin = $ 228 (01/11/2018));
ZEC ZiCache (1 Z-cash = $ 677 (Jan 11, 2017));
Dash DASH (1 dash = $ 1040 (01/11/2018));
Ripple XRP (1ppl = $ 1.80 (01/11/2018)).
The most popular cryptocurrency is bitcoin. The name consists of two words “bit” – the smallest unit of information and “coin” – which in translation from English means “coin”. For him, created not only a program, but also a special digital wallet, in which you can store this currency. To date, there are already ATMs where bitcoins can be converted into ordinary money. Some stores accept this currency for settlement.
Cryptocurrency: what it is, how it works, how to make money
Why is cryptocurrency necessary?
Every year a large number of people go abroad. Some in order to rest, and others in business. When a person plans a trip, he always carefully considers the financial side of the trip, namely: he makes up a budget, converts ordinary money into currency, transfers some funds to a card. Unfortunately, no one is immune from the scammers and anyone can come across them during the trip.
You will have to spend almost all your time on restoring blocked cards, searching for acquaintances who could borrow money. All this can be avoided if you store money in a digital currency protected by cryptography. Also, the popularity of virtual money is growing and already a large number of stores accept them for payment.
Cryptocurrency: the pros and cons
In its main characteristics, digital money is different from ordinary. Every day cryptocurrency is becoming more popular. And this is not casual, because it has a huge number of positive aspects:
Anyone can make such money with the help of mining. And all because there is no single emission center and organs that would control this process.
All transactions are anonymous. The single information that is open is the electronic wallet number.
For each type of currency, a release limit is provided. Therefore, in relation to this money there is no inflation.
Cryptocurrency is protected by a special code like an electronic signature. It can not be copied, and therefore it can not be forged either.
When conducting cash transactions, the commission is not charged, as there is no third party – the bank.
Availability of money anytime, anywhere. Wherever you are, you can always control your digital money, check the validity of operations.
As you might have noted, cryptocurrency has a lot of advantages. But despite this, such digital money has its drawbacks, namely:
In the event that a user lost a password from his e-wallet, then he lost all the funds that were on it.
The cost of cryptocurrency is very often and rapidly changing.
The process of obtaining cryptomonet is complicated and mining with the help of special equipment of individual users is becoming less profitable.
How to make money on cryptocurrency
Most believe that cryptocurrency exists only to protect their money or to pay with such money in some stores. Few people know that you can earn on cryptocurrency.