What is actually meant by cryptocurrency?

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What is actually meant by cryptocurrency?

What is actually meant by cryptocurrency

Understanding what Cryptocurrency or crypto currency in the digital era is not an easy thing, especially for ordinary people.

However, the presence of this digital currency is increasingly in demand as an investment instrument. This is because the value in the cryptocurrency continues to increase fluctuating from time to time.

For this reason, so that it is not outdated, you need to understand the definition, basic concept, to the cryptocurrency transaction mechanism. Here’s the review!

What is Cryptocurrency?

Cryptocurrency is a decentralized digital currency developed using encryption technology. That is, no party has become an intermediary in a transaction. Payments made using a digital currency take place peer-to-peer, which is from the sender directly to the recipient.

However, all transactions carried out remain recorded in the system on the Cryptocurrency network. Recording is done by Cryptocurrency miners and will receive a commission in the form of digital money used.

Because it is decentralized, Cryptocurrency requires a computer with special and sophisticated specifications. Generally using Blockchain platforms so that the digital currency can be used to transact.

You can understand the blockchain like a ledger containing a database, anyone can access this platform even though it doesn’t make a virtual money transaction at all.

Cryptocurrency type

Basically, Cryptocurrency has begun developed since the 1990s. However, about 10 years ago was only popular among the world community.

Currently there are several types of crypto currencies that are widely used, among others:

  • Ethereum
  • Litecoin
  • Ripple
  • Monero
  • Bitcoin.

In addition to the names of these currencies, there are still more than 1000 Cryptocurrency which is now circulating throughout the world.

By its creator, Satoshi Nakamoto, Bitcoin was only created up to 21 million coins in accordance with the agreed protocol. This amount is predicted that it will not run out until the next 2140. You can transact with Bitcoin through computer devices, without intermediaries of banks or other financial institutions.

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Bitcoin miners tend to be minimal risk because it will not suffer losses due to forgery or inflation as well as the conventional currency printed.

Cryptocurrency transaction mechanism

After understanding what is cryptocurrency, you also need to know the mechanism or way of working transactions carried out using this digital currency. Interestingly, Cryptocurrency transactions offer high enough flexibility because it can be done anytime and anywhere in the whole world.

Pretty armed with a smartphone or PC connected to the internet, you can transact either send or receive a sum of money without going through an intermediary. Even transactions using this currency can be completed in minutes without worrying downtime.

For example, when you send money to a recipient. Both parties will be given information related to the amount of transactions made. Also equipped with digital signatures through private keys into the Cryptocurrency system used.

This confirmed transaction is then permanently stored. No party can change, plow, or even fake the note.

Because it is permanent, all transactions using digital currencies cannot be canceled for any reason. For that, you just set foot to know what Cryptocurrency should be wiser before transacting.

How to determine the Cryptocurrency exchange rate

Given the cryptocurrency was created with uniquely encrypted cryptography, it was not a strange thing if the value was very dependent on the market mechanism.

Please note, the value of each type of cryptocurrency is the same as financial products in general. Where when demand is quite high while miners are only a few, the value will increase. Hr.

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For example, Bitcoin which was only provided as much as 21 million since it was first created so that it had a relatively higher value compared to other types of cryptocurrency.

In other words, the value of the Cryptocurrency currency is fluctuating that can easily increase or actually decrease based on user availability or trust.

Some time ago, the Cryptocurrency value was also influenced by Wannacry attacks that increased the number of transactions using Cryptocurrency.

It is necessary to know the highest ranking in the Cryptocurrency activities there are Bitcoin with market capitalization reaching USD63.6 billion, and followed by Ethereum which has a capitalization value of USD12.9 billion.

Transact with Cryptocurrency

You who have routinely mine Cryptocurrency can use the virtual currency for several types of transactions.

Starting from buying and selling activities in the stock market by exchanging conventional currencies owned for a number of Bitcoin, personal expenses with the company’s records where you transact provide a payment of a digital currency, to raise funds in bulk or crowdfunding to minimize transaction costs if the project is funded not Successful.

Current Cryptocurrency Stock Market can be found in America, namely InterContinental Exchange (ICE), Chicago Mercantile Exchange (CME), and the Chicago Board Options Exchange (CBE).

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