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What is cryptocurrency?

Understand what cryptocurrency is, how they work, and learn three examples among the most popular, including Bitcoin

cryptocurrency is a virtual currency, which can be obtained by mining with your computer or purchased on digital wallet sites. Today, several transactions of buying and selling products and services can be paid with cryptocurrencies, which are an option to traditional money (with regard to making digital transactions).

What is cryptocurrency?

A cryptocurrency is a virtual currency that has no physical representation — that is, ballast. It is generated through a network of thousands of computers, which use their computing power to perform authentication calculations. Each unit of the cryptocurrency is validated by a chain of encrypted blocks, the blockchain, which ensures the reliability of the transaction.

Once a cryptocurrency is mined and made available, fractions of them are given to the owners of the machines that collaborated with the calculations. Such virtual currencies are not controlled by any Central Bank —which increases the authorities’ general mistrust of the category—and, in the case, anyone can use a computer to mine them. However, it is more recommended (and less costly) to acquire the ciphers through virtual wallets.

Today, various products and services can be paid with cryptocurrencies, through specific applications that carry out financial operations.

Cryptocurrency examples

There are several types of cryptocurrencies, more or less popular, more or less secure, maintained by companies linked to the financial market, social networks or even governments. Not to get out of focus, we explain here three.

1. Bitcoin

Bitcoin

Bitcoin is the most popular cryptocurrency, having been the first to be created. The article describing its operation was published in 2008 by “Satoshi Nakamoto” (probably a pseudonym, it was never definitively identified) and the mining software was released in 2009. Since then, the value of the coin has fluctuated enormously, reaching peaks of up to US$ 14,000 and phenomenal falls throughout history, being quoted in the house of cents. The success of bitcoin has encouraged the creation of more cryptocurrencies.

2. Libra

Facebook cryptocurrency; Libra

Libra is Facebook’s cryptocurrency, announced in June 2019. It would be backed by real currencies, such as dollar and yen, could be spent on group apps such as WhatsApp and Messenger and anyone could buy it with real money, including real ones.

3. Petro

Petro

Petro is a very different cryptocurrency: it is issued by the Central Bank of Venezuela and was created as a way to contain the financial crisis that the country is going through. Its ballast is oil, which makes a petro equal to the price of a barrel (US$ 57, value of 11/05/2019), but is also linked to the sovereign bolivar, a new currency created in 2018.

Venezuelan President Nicolás Maduro has since created the petro by pressuring banks and companies to accept the cryptocurrency as a way to enable a possible resumption of the local economy.

Sources: Techcrunch, Investopedia.

George Philiphttps://www.betechwise.com
George is a technology content writer with few years of experience. Specialized in mobile devices, personal computers and consumer technology, as well as software and applications. He explains all technological concepts so that users with less knowledge can understand it. If not writing, you may find him engrossed playing action games on his smartphone. Just so you know, he loves Xiaomi products alot. You may contact him via his email - [email protected]

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