When most people think about cryptocurrency, they may also think about cryptocurrency. Very few people know what it is, and for some reason everyone speaks as if they knew. I hope this report will clarify all aspects of cryptocurrency so that you have a good idea of what it is and what it is about before you finish reading it.
You may or may not have cryptocurrency for you, but at least you will be able to speak with a degree of confidence and knowledge that others cannot.
There are already many people who have reached the status of millionaires engaged in cryptocurrency. Obviously, there is a lot of money in this new industry.
Cryptocurrency is an electronic currency, short and simple. However, what is not so short and simple is its value.
Cryptocurrency is a digital, virtual, decentralized currency produced using cryptography, and according to Merriam Webster’s dictionary, it is “computerized encoding and decoding of data.” Cryptography is the foundation that enables debit cards, computer banking and e-commerce systems.
Cryptocurrency is not supported by banks; it is supported not by the government, but by the organization of very complex algorithms. Cryptocurrency is electricity encoded in complex strings of algorithms. What gives them value for money is their complexity and protection from hackers. It is very difficult to replicate cryptocurrency.
Cryptocurrency is the exact opposite of what is called fiat money. Fiat money is a currency that derives its value from a government decree or law. The dollar, yen and euro are all examples. Any currency defined as a legal tender is fiat money.
Unlike fiat money, another part of what makes cryptocurrency valuable, as a commodity like silver and gold, is that it is only available in limited quantities. Only 21,000,000 of these extremely complex algorithms have been produced. Neither more nor less. It cannot be replaced by more printing, for example, printing more money to strengthen the system without government support. Or something that will instruct Federal Reserve banks to adjust to inflation by changing a bank digital book.
Cryptocurrency is a tool for buying, selling and investing that completely avoids both government control and banking systems to track the movement of your money. In an unstable world economy, this system can become a stable force.
Cryptocurrency also gives you a lot of anonymity. Unfortunately, this can lead to abuse by a criminal element who uses cryptocurrency for their own purposes, just as ordinary money can be abused. However, it can also prevent the government from monitoring your every purchase and interfering with your privacy.
Cryptocurrency comes in several forms. Bitcoin was the first and is the self-modeling standard of all other cryptocurrencies. All are made from complex coding tools with accurate alpha-numeric calculations. Some other cryptocurrencies are Litecoin, Namecoin, Peercoin, Dogecoin and Worldcoin. These are called altcoins as a generic name. The prices of each are regulated by the supply of a particular cryptocurrency and the market demand for that currency.
The origin of cryptocurrency is very interesting. Unlike gold, which has to be extracted from the ground, cryptocurrency is simply an entry in a virtual ledger stored on various computers around the world. These records must be “mined” using mathematical algorithms. Individual users, or more likely a group of users, perform computational analysis to find a specific series of data called blocks. The “miners” find information that creates an exact example of a cryptographic algorithm. This time it was applied to the series and they found a block. The data block was encrypted after the equivalent data series in the block was matched to the algorithm. The miner receives a certain amount of cryptocurrency reward. Over time, as the cryptocurrency decreases, the amount of the reward decreases. In addition, the complexity of algorithms in the search for new blocks is growing. It is difficult to find a suitable series in terms of calculation. Both of these scenarios come together to slow down the emergence of cryptocurrency. This mimics the difficulty and scarcity of extracting a commodity such as gold.
Now anyone can be a miner. The creators of Bitcoin have turned the mining tool into an open source, so it’s free for everyone. However, the computers they use work 24 hours a day, seven days a week. The algorithms are very complex and the CPU bends completely. Many users have computers specifically designed for cryptocurrency mining. Both user and specialized computer miners are called.
Miners (human beings) also keep transaction books and act as auditors to ensure that a coin is not repeated in any way. This protects the system from breakage and confusion. Each week they continue to operate, they receive a new cryptocurrency and receive a salary for this work. They store cryptocurrencies in special files on their computers or other personal devices. These files are called wallets.
Let’s take a look at some of the recipes we learned:
• Cryptocurrency: electronic currency; also called digital currency.
• Fiat money: any legal tender; supported by the state, used in the banking system.
• Bitcoin: the original and gold standard of cryptocurrency.
• Altcoin: Other cryptocurrencies made from the same processes as Bitcoin, but with minor changes in coding.
• Miners: an individual or group of individuals who use their own resources (computers, electricity, space) to produce digital coins.
o Also a special computer specially designed to find new coins through a series of calculation algorithms.
• Wallet: A small file where you store your digital money on your computer.
Brief conceptualization of the cryptocurrency system:
• Electronic money.
• Issued by people who use their resources to find coins.
• Stable, limited currency system. For example, there are only 21,000,000 bitcoins produced for all periods.
• It does not require any government or bank to operate.
• Valuation is determined by the number of coins found and used, and is combined with the people’s demand for these coins.
• There are several forms of cryptocurrency, primarily Bitcoin.
• It can bring great wealth, but as with any investment, there are risks.
Most people find the concept of cryptocurrency attractive. For many of them, this is a new area that could be the next golden culture. If you see that there is something you want to learn more about cryptocurrency, you have found the right report. However, I have barely touched on the surface in this report. There is more to cryptocurrency than I did here.