Increasingly, in financial news and Forex trading, you can hear about cryptocurrencies and bitcoins. They are constantly capturing news headlines. Let's understand what cryptocurrency is and the mystery surrounding them.
Cryptocurrency - virtual money exchanged on the Internet, equivalent to real money and having an official status, but not having a physical form.
Simply put, cryptocurrencies exist solely in the form of data, but at the same time, they work the same way as regular money.
The term “cryptocurrency” was used in 2011, in an Forbes article. Nowadays, the term has become firmly established and is applied to a currency that exists only in digital space, without any coins or paper notes.
The incredible popularity of cryptocurrency is explained by its incredible volatility and mainly upward movement. Which, in turn, gives an incredible earning potential. A trader does not even need a leverage and any significant personal investment, with high returns. The basis of cryptocurrencies are the so-called "coins" (coins).
In order to purchase a certain number of coins, you need to connect to the service of their creation, become a participant in mining (mining) and have patience, in anticipation of “earnings”. Owning a coin means concluding a kind of agreement that a certain number of coins were created by a legitimate miner who is their sole owner.
It is important to emphasize that the price of any cryptocurrency depends mainly on supply and demand, and are not influenced by the real economy and politics.
Basically, there are two options for trading cryptocurrency:
Ways to purchase cryptocurrency:
Mining on your own computer (you need a strong video card or farm for computing a specific algorithm).
Connect to cloud services. For a certain monthly fee, gain access to powerful remote servers.
Purchase at the current rate in an online exchanger offering a favorable rate and accepting the available currency.
Cryptocurrency transactions differ from currency transactions in that they are not regulated by banks or other financial organizations. All transactions are recorded in a special electronic journal called the “blockchain”.
There are many different cryptocurrencies, the most popular of them are:
Altcoins are all cryptocurrencies that appeared after bitcoin. Most modern cryptocurrencies are altcoins. The most popular altcoins are:
But, like trading in real currencies, cryptocurrency trading has its own risks that must be taken into account.
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