Crypto currencies have been setting an innovative trend since the last decade. This digital currency has shown its significance in stock markets, trades, accounting firms and companies even though it does not exist in hard form. Many people don’t understand the complex system of crypto currency and get confused that what exactly is this?
To put it into simple words, other fellows who use the same system can share this electronic money system. This online currency is not owned by any government and it applies usage of encryption in transaction processes. These transactions are added to the public ledger. This currency is decentralized and only the people, who use it, determine this currency’s value. This is the reason why it is called an alternative currency because it fulfills the same purpose such as that of tradition currencies like US dollar yet distinguishes from it. This technical way of dealing can be risky but you can use it if you are an investor, entrepreneur or an executive and yield good profits.
History of Crypto currency
There were many concepts of digital cash system even before the advent of Crypto currency. Web money and egold were some of the methods used by certain individuals and states. The Bit gold in 1998 started the similar trend to crypto currency but Bitcoin replaced it in the 2008. Satoshi Nakamoto is the person who invented Bitcoin, also known as the first crypto currency, in his attempt to create a digital Cash System. This system was unique because the rules of central government did not apply on it. The Bitcoin he invented was primitive and still the most valuable among all crypto currencies. The value of Bitcoin has reached $729 since its introduction in 2009. There are many other crypto currencies besides Bitcoin these days. Some of the most prominent Crypto currencies are:
How to use the Crypto currency
This currency is decentralized which means it resembles gold or even precious stones. There are certain benefits but these come with the risks. This can be a risky investment and has extreme aspects. You can even suffer a complete loss if rates go down but on the other hand, you can earn profit of thousands of dollars if the value rises.
The Crypto currency can only be generated through an electronic process called mining. For this purpose, the user is required to own a digital wallet where the currency is stored. An account is needed for all the transactions to be made along with a private key that contains cryptography. The crypto currency that is transacted is stored electronically in the receiver’s blockchain, increasing the monetary unit and confirming transfer of funds. The network of nodes validates transaction and user’s status using algorithms.
Following is the mining process for one of the crypto currency.
- Get a wallet to receive and send crypto currency.
- Sign up for the mining tool where the process of mining is carried out. This will provide you with the mining power with other user and the platform to be paid for mining.
- After signing up on the mining tool, you are required to create a bot that will mine for you.
- Install the mining software on your computer. In addition, this will allow the computer to mine the specific crypto currency.
- The worker that mines the coin collects it in the mining pool account and then sends it to your wallet.
Salient features of Crypto currencies
The people who use it decide the fate of crypto currency and similarly the rates are decided by the consensus. There are certain features of this currency that are useful despite all the risk it has.
These digital currencies are not connected to the real world currency by any means. The crypto currencies are associated with the addresses and hence it is nearly impossible to connect the real world user’s identity to these addresses.
The fact that the crypto currencies are not occupied by the third parties makes it secure. Cryptography system is used in these currencies to ensure the maximum level of security regarding funds. The owner can use his private key in order to send the crypto currency.
Instant Transactions Globally
The transactions made are fast and can be verified in a few minutes. Your geographic location does not matter in this regard.
The usage of this system is growing rapidly. Large firms and companies make deals using this currency as a medium. You can trade, exchange and even make purchases using crypto currency. It even four times less tax per transaction than the credit card companies does. If you are an intriguing investor, you can give it a try.