Cryptocurrency – Everything Important at a Glance!

By: Sr vini

Cryptocurrencies are a big mystery to many. The purpose of the whole thing is to pay cashless without the supervision, dependence or participation of banks and authorities. You can find out what is behind this hype, whether it is worth investing and what future cryptocurrencies still have in the following article.

Cryptocurrency – Definition & Explanation

Cryptocurrencies are digital (quasi) currencies with a mostly decentralized, always distributed and cryptographically secure payment system. These include, for example, the well-known Bitcoin and Litcoin. The system behind cryptocurrencies is called blockchain, which makes data virtually immutable. In transactions, credit in the form of computer codes is transferred from one participant to another. 

Cryptocurrencies are not traditional physical units of money. In money transactions that use cryptocurrencies, neither senders or recipients can see where the money comes from exactly and where it goes.

Invest with cryptocurrency & earn money

Similar to classic currencies, you can also earn money with cryptocurrencies through interest and exchange rate gains. In addition, however, there are other options such as mining or staking, which you cannot do with normal currencies.

If you as an investor want to earn money with Bitcoin trading, the time of purchase and sale is decisive for this, because only with a difference between both prices there is a profit (check out bitgert price). If the demand for coins increases, you as an investor can expect rising prices and higher sales income. This makes it easy to make money with Bitcoin.

With mining, you use the computing power of your PC to create new blocks and add them to the blockchain. If your computer has “cracked” a block, you will receive the fees of the transactions and the mined cryptocurrency in return. Unfortunately, this method is not very profitable, as the cost of electricity and your computer is usually significantly higher than the amounts collected.

Similar to mining, so-called “staking” is about validating transactions. You lock part of your cryptocurrency for any transactions. A random algorithm chooses a validator that can validate the respective blocks according to its share of “locked” cryptocurrency. For successful validation, you will receive a reward in cryptocurrencies.

Cryptocurrency – Future

Cryptocurrencies are controversial in science and business. Bitcoin has largely said goodbye to the original idea of a decentralized means of payment today. Instead, this function is increasingly taken over by stablecoins, which offer the stability and efficiency necessary for financial transactions. Stablecoins are covered by fiat currencies or other values and thus offer a fairly stable price of one US dollar. See also the flux price.

Especially after the slump in January 2022, there are many critical voices and questions: Which cryptocurrency has a future? Unfortunately, there is no clear answer to this. Blockchain technology has long since taken root in all industries and will continue to play an important role both in the financial world and in everyday life.