Cryptocurrencies have several characteristics that differentiate them from traditional financial systems. One of these characteristics is that they are not regulated, controlled or protected by any institution and do not require the intervention of any intermediary during transactions. To control these transactions, cryptocurrencies make use of a decentralized database, blockchain or accounting record. Cryptocurrencies are not backed by a banking entity, central bank or any public authority, so they are even less supported by customer protection methods. Regarding the operation of digital currencies, we must remind you that once any transaction with cryptocurrencies is carried out, it is not possible to cancel said operation, because the blockchain is a record that does not allow data to be deleted. If you wish to reverse a transaction, it will be necessary to execute the opposite one. Since cryptocurrencies do not exist physically, it is necessary to use a cryptocurrency wallet or digital wallet service, which is also not regulated to store them. Basics to understand how cryptocurrencies work To understand how cryptocurrencies work, it is necessary to know and understand several basic concepts: ✅ Decentralized computers: this means nodes spread around the world with copies of all the transactions that have been made. ✅ Miners: These are people who are part of the nodes, and who have the incentive that every time new Bitcoins are generated, they are distributed among those who are part of these nodes. ✅ Exchanges: These are companies that allow you to exchange currencies such as euros or dollars for Bitcoins and enter the world more easily. When you get them, they are stored in 'Wallets' or digital wallets, these are applications that allow you to save or exchange them. Each cryptocurrency has a different algorithm, these do not repeat each other, with this the management of the number of new units that are issued each year is achieved. An example of this is Bitcoin , which every four years the amount generated is reduced by two, and it is established that only a total of 21 million Bitcoins are issued, after that amount, no more will be generated. This is what makes it very different from conventional currencies, since the banks that issue and regulate conventional currency modify its value at will. This gives it more freedom to generate a certain value compared to other currencies that can be devalued when the banks indicate so. Blockchain A network of decentralized computers is known as a blockchain . Its blocks or nodes are connected and protected using cryptography . Each block links to a previous block, as well as a date and transaction data, and by design, these block chains cannot modify said data. So, it's as if this blockchain were an open, public ledger where all the transactions made by two users are recorded. When we make a transaction, this data is recorded in a block, and it is automatically compiled and joined with the rest. This means that the data cannot be modified or manipulated, unless the rest of the blocks are modified, which is extremely complicated. 20% EXTRA DISCOUNT Get started today and get fully certified with our course Blockchain Technology 100% online at your own pace Practical exercises Lifetime Access Certified endorsed Apply the coupon [DARE] and get an extra 20% discount for only 100 students. Click the button and join! Learn more The most common cryptocurrencies Bitcoin The first cryptocurrency worldwide. It is positioned as the most popular in this virtual market. Ethereum Based on the Turing foundations, this cryptocurrency makes it possible for developers to create different applications or improve existing ones that are not compatible with the Bitcoin platform. Bitcoin Cash This of course comes from Bitcoin and arises as a result of the separation of its community. Its value has been increasing considerably, managing to position itself among the list of the five most coveted cryptocurrencies, in terms of market capitalization. Bitcoin Gold It is also based on Bitcoin, but it uses a different type of algorithm that allows for encryption. It has also decided to follow the patterns of the Bitcoin project. Litecoin It was founded with a main motive of being “digital silver” trying to be the antagonist of Bitcoin with the term “digital gold”. It is considered a derivative of the Bitcoin community, only its limit of 84 million vs. 21 million of Bitcoin differentiates it. In addition, it can generate blocks four times faster. Ripple This cryptocurrency does not use the blockchain to ensure that transactions reach consensus across the entire community. It uses a faster iterative consensus process than Bitcoin. Of course, this makes it vulnerable to hacker attacks. FREE DOWNLOAD We also make this valuable resource available to you completely FREE so that you can master investing in Bitcoin. What can we do with cryptocurrencies? There are many uses for cryptocurrencies, although they are mainly used for commercial activities, here we mention other uses that we can give them today: 1. Purchase of products Cryptocurrencies are widely accepted for online transactions, online and offline payments. Today, you can pay for flights, mobile apps, jewelry, hotel stays, computer parts, and any other good you can imagine. 2. Investment Cryptocurrencies are considered one of the most attractive investments available on the financial market. The number of people who take the risk and invest are making huge profits. There are even people who claim that by investing in these digital currencies, they have become millionaires today. 3. Commercial payments Cryptocurrencies are accepted as payment, just like traditional cash. Cash withdrawals are also possible, using the Coin ATM Radar you can check which of the 1,800 ATMs spread across 58 countries is near you so you can exchange your cryptocurrencies for fiat money. Courses that may interest you Do you want to acquire more skills on Blockchain investment in record time? We recommend our courses Introduction to Front End Web Development, JavaScript Fundamentals and Web Development in WordPress See product See product See product