Financial transactions worldwide have sought to be increasingly versatile, inclined to adopt new trends and modes of operation to provide the user who buys or sells a particular asset, the greatest possible convenience and ease in developing such transactions.
Cryptocurrencies: the main virtual currencies of the online market
The virtual currencies, better known as cryptocurrencies, are not the currencies of the future but of the now and have arrived to stay in the world of trading and online commerce.
Everyone is talking about crypto coins, wallets, brokers and so on… but why are cryptocurrencies so popular these days? What are the advantages of investing in cryptocurrencies? All these questions and many others will be revealed to you throughout the text, don’t worry!
What are cryptocurrencies?
Surely you have asked yourselves at some point, how is it that money has a great economic value? For, in addition to the fact that a currency is backed by a country’s reserves and economic stability; a currency of any kind is an element of commerce in which a large number of people, institutions, entities and others trust to carry out financial transactions.
For example, if the Americans and the world market suddenly stopped believing in the dollar, the banknotes that make up the monetary cone would become simply stamped papers, striking green, but worthless.
A cryptocurrency is not a physical currency as such, it is a virtual currency that represents a digital unit which can be used to purchase goods or services. The calculation of this virtual currency is based on algorithms and for its operation, thousands of volunteers join their efforts to work on the open source of that currency, verifying transactions, maintaining stability, security and other factors so that it is possible to continue operating crypto currencies.
Why are there high-value cryptocoins?
A secure and stable currency is a currency that many people would trust; if a currency presents these characteristics, its demand increases abruptly and in the same way its monetary value. Years ago, when cryptocurrencies were a new concept in the online market near 2009, their values were between 0.15$ and 0.5$; today there are crypto currencies whose value has increased very considerably, becoming quoted between 2017 and 2018 near the $20,000 in the case of Bitcoin (BTC).
Characteristics of crypto currencies
- Cryptocurrencies are not regulated by corporations or financial institutions nor do they depend on banks, administrators or states. The value of cryptocoins is established by the number of users who operate them, as well as by the law of supply and demand. A great advantage of their decentralization is that the crypto currencies are not affected by induced crises of a political, social, devaluation, regulation of organisms, or other factors.
- Its decentralization and independence from agencies that regulate them provide it with great stability in the face of constant fluctuations, as occurs in traditional monetary systems and financial crises. However, they turn out to be very volatile because they do not have an economy or potential to support them.
- Commissions for transactions with crypto currencies are very small, because intermediaries are eliminated. These small commissions serve to maintain the pages that allow the free trade of crypto coins.
- You can operate cryptocurrencies from wherever you are. You can buy and sell from anywhere on the planet, you just need an internet connection and a virtual wallet.
- Transactions with cryptocurrencies are anonymous, but no one will know details about your capital. They are also voluntary in nature, as it is an alternative method of payment and depends solely on the person whether or not he or she will use it; the government does not impose transactions with crypto currencies.
- The time it takes for a cryptocoins transaction to become effective between two users is only a couple of minutes. Crypto currencies are characterized by offering an instant payment method as opposed to bank transactions that can take up to two days.
- The growth of cryptocurrencies is controlled, previously defined and secured by the encryption of algorithms.
How do CryptoCurrencies work?
Before knowing how to operate with cryptocurrencies, it is important to know the principle of operation of the same, as well as the digital systems that allow transactions to be made safely. These systems are the basis and the fundamental pillar of cryptocurrencies. Below you will learn everything related to the functioning of cryptocoins and many topics of interest, keep reading!
Brief history of cryptocurrencies
The term cryptocurrency first appeared in 2008 in an article written by Japanese Satoshi Nakamoto (or a group of developers hiding behind this name). This character was in search of some computer method to be able to carry out a transaction between two people without the need of intermediaries or third parties, these could be an authority that provides value to a certain currency, some banking entity that directs movements, among others.
Months later, the algorithmic structure was implemented as well as the system to verify transactions, thus imposing the bases for the birth of the first and most important cryptocurrency until today, the Bitcoin.
What is the Blockchain network?
Satoshi’s main idea was to replace the set of banks that register, authorize and control financial transactions with a network of computers that are located in different parts of the world, each computer performs a certain task contributing to the ultimate goal: to verify transactions grouped into sets of blocks stage by stage at each node.
These blocks of information store and record operations publicly and collectively in chains of blocks in a virtual book which is scattered throughout the network. This famous network which is emphasized is based on nodes, these in turn are localities in which an authentic copy of all transactions is stored. The nodes update their information constantly depending on the new movements that are made.
The security with which transactions are handled is magnificent, because, if at any time a transaction were to be hacked, the nodes would reject it immediately for not being able to unify the information in blockchain, thus ceasing the attempt of hacking.
What are cryptomime miners?
Logically, there must be an entity or group of people who verify the transactions carried out with crypto currencies, these are known as miners. Miners are people who voluntarily make their computers available to use their power and time to record and verify transactions. Of course, all work has its reward, because these activities are paid with different crypto currencies such as Bitcoin, Ethereum, Dash, or others, depending on the software that the person uses to provide the service. It is not necessary to have a license to mine, even any particular person can be a miner.
Cryptocurrencies and Tokens, are they the same or not?
Although it is very common nowadays to talk about virtual currencies, crypto currencies and digital money, it is often confusing to use the terms crypto currencies and tokens with the aim of referring to the same virtual asset being two totally different things. Therefore cryptomoneda and token are not the same, then you will see the differences between one and the other.
Cryptocurrency is in principle a means of payment of the cryptographic type with which it is possible to purchase goods and services. The crypto money can be capitalized in the online market and can be traded from different platforms, brokers, Exchanges, etc.. It is virtual money that depends on the credibility of those who manage it and therefore has an intrinsic value.
It refers to a kind of card, because of its interpretation in English and its meaning may vary according to the context in which it is used. The tokens also have a value but unlike the cryptocurrencies, they can represent different elements: assets, contracts, shares, rights, among others.
Tokens facilitate operations within the same platform, therefore they cannot be capitalized like cryptocurrencies, they simply contribute to the financing and distribution of goods in a local environment from which they cannot exit. On the other hand, cryptocoins can be traded and paid for with goods and services.
Top cryptocurrencies, the most popular cryptocoins
You may have wondered how many cryptocurrencies there are today, because there are really about 1400 crypto currencies to date, you read it this way because new cryptomonedas are constantly being born that seek to capitalize on the market and get new investors that give them credibility and value.
Logically not all cryptocurrencies are worth the same, some are priced up while many others have not yet been developed successfully. What is true is that cryptocoins are very volatile and their value can change considerably in just a couple of days.
Below you can see the most popular cryptocurrencies that currently exist in the market, these in turn have been forging a good reputation and today are the key options for large investors and thousands of people who use this means of payment either to cost goods or to invest in the online market.
It is the most popular crypto currency and the first to be created, it was launched on January 3, 2009. This cryptomontage laid the foundation for the creation of other cryptomonedas and completely changed the way of processing transactions with blockchain technology. Currently, Bitcoin (BTC) can be traded in the FX market, and is the cryptomone with the greatest potential.
Ethereum is a decentralized platform launched in August 2014 by the Ethereum Foundation of Swiss origin, which develops intelligent contracts which are applications that run under an established objective without the probability of fraud, censorship or interference. Ethereum has its own internal currency, the Ether. At present, Ethereum (ETH) is considered the second most important cryptomone in the world and can be traded and traded on the Forex market.
Created in 2012 under the name of OpenCoin Inc. Born for business use, offering banks and payment providers a reliable option for cross-border payment liquidity. Ripple payments run in 4 seconds; its scalability is impressive as it handles around 1500 transactions per second. Its open source technology is designed under the principles of blockchain. This crypto currency can be traded in the Forex market.
Standing out as a highly successful token today, EOS is among the most popular crypto coins considering that little time has passed since its launch. It is characterized mainly by the technology it adopts, its functionality is based on the blockchain but incorporating new and productive applications to provide the development of a more robust environment.
Litecoin is a virtual currency that allows you to make instant peer-to-peer payments with a very small commission from anywhere in the world based on the blockchain. It is a global network with open source, decentralized and lacks main authority. Litecoin is characterized by immediate transactions and has incredible storage. Litecoin miners receive 25 litecillas per block, although this amount is halved every 4 years.
Bitcoin Cash (BCH)
Bitcoin Cash its a popular cryptocurrency emerged in mid 2017, it is a relatively new cryptomoneda that has managed to gain a good reputation by being among the first. It is born from Bitcoin with the aim of increasing the speed of operations. It is a cryptomone with an upward trend, having a large volume of quotation in the financial markets.
Binance Coin (BNB)
Created for the purpose of solving transactions on the Binance platform, it is a relatively new crypto currency and has managed to position itself in the top of the most important crypto currencies of the moment. Binance is a recognized Exchange platform that has its own virtual currency, offering users who trade with it nice discounts and benefits. Binance Coin (BNB) is a crypto currency that is making the difference with respect to virtual currencies of other platforms.
Lumens turns out to be the cryptomone of the Stellar platform. This on its part is capable of carrying out a large number of transactions in a second at no additional cost. Stellar’s main objective is to create links between banks and individual users anywhere in the world so that everyone can be in contact with financial activities.
It was born in 2014 with the brilliant purpose of eliminating the volatility of cryptocurrencies as well as to allow better management in financial transactions. It is characterized by having a platform whose local currency is referred to traditional currencies, specifically the U.S. dollar (USD); therefore 1 Tether will be equivalent to 1 U.S. $.
Cardano is a platform that has its own cryptomoneda (ADA), emerged in mid / late 2017 and has proved to be a technological innovation product of years of research as it incorporates a multilayer structure, thus offering features and advantages over other blockchain technologies.
Tron is the platform that has its own cryptomoneda: the Tronix; it arises with the full objective of ending the monopolies of data decentralizing the Internet for it. The environment of the Tron platform hosts common users and content developers, the difference between one and the other lies in the fee or commission to which they must adhere, since common users must pay to make use of the applications while the seconds do not require canceling any fee.
Bitcoin SV (BSV)
It is a cryptomontage that has come as a surprise in the financial market and has managed to take one of the first places among the most popular cryptomontage of the moment. Bitcoin SV is the result of breaking one string after another, as it is a bifurcation of Bitcoin Cash with different aspects of traditional Bitcoin.
It is a cryptomontage launched in early – mid 2014 using first the blockchain technology and then switching to a totally different protocol to Bitcoin called CryptoNote. Its essence and foundation focuses on the anonymity of transactions, as it employs different wallet addresses for each transaction. It is widely used by users who trade online as it is possible to trade in the FX market with Monero.
It is a platform with its own cryptomone (MIOTA) that seeks to consummate what is known as the Internet of things and allow transactions between users and anonymous individuals. It employs its characteristic Tangle technology which is presented as an alternative to the original blockchain. He has managed to gain a good position among the most important crypto coins despite the short period of time he has been in the virtual world.
Dash is a cryptomontage that, like many others, bases its operation on the blockchain although it brings with it slight changes that benefit miners and users who employ a particular node called Masternode. It is a crypto currency that has been in the market for 5 years and has reached capitalization values that place it at the level of popular crypto currencies such as BTC, XRP, ETH and many more.
Maker is a decentralized platform based on the blockchain, in this system two different tokens are handled: the Daicoins and the Makercoins. Its main objective is to maintain the stability of the cryptomone as well as the 1 to 1 parity of this cryptomone with the U.S. dollar, is characterized by allowing direct exchange with Ethers. In spite of having been in the market for a short time, it is capitalized with great potential.
NEO this is an Asian platform that seeks to reach a large community by emerging as an alternative to Ethereum’s intelligent contracts and Dapps. It has 5 years in the market and has managed to forge itself with a respectable place in the world of crypto coins. It is based on its own blockchain and has the support of the Chinese government.
After its launch in 2017, Ontology turned out to be a very unique ICO, as its tokens were not sold as commonly happens with cryptomedas. Privileged users who had NEO in their wallets were given ONT coins by airdrop. One year later it went on sale and has experienced fluctuations as well as all the crypto currencies.
Tezos is a cryptomoneda that first saw the light in 2017, backed by a powerful team of developers and supported by sponsors of great category was a great success that then created intense conflicts and fights between their relatives. However, it managed to recover again thanks to the changes made to its structure, the release of a beta version and also by the tokens assigned to its users.
Ethereum Classic (ETC)
It arises as an alternative after the hacking suffered by Ethereum and the great loss of Ethers. Ethereum Classic is the result of the continuous and constant mining process of users in the old Ethereum blockchain and although it has not managed to reach the same height of Ethereum, ETC is in the top crypto currencies of the moment.