In this article we will talk about what cryptocurrencies are and how they are applied in the market, we will also talk about the advantages they bring when using them.
Cryptocurrency is the generic name for decentralized digital currencies, created on a blockchain network from advanced encryption systems that protect transactions. Just as physical currency has serial numbers, watermarks and other security devices, cryptocurrency uses cryptography.
If you don’t know some previous terms, don’t worry, we’ll explain below:
A blockchain network is a technology that uses a system that allows the sending and receiving of some types of information over the internet, as if it were a book of records, and these are pieces of code generated online that carry connected information, like blocks of data that form a chain – hence the name “block chain”.
Encryption is a security layer, guaranteed by the blockchain, which allows the issuance and transaction of virtual currencies more securely by applying an algorithm to encode them so that they no longer have the original format and therefore cannot be read. It is from this technology that comes the name cryptocurrency – encrypted currency.
In the use of cryptocurrencies there are several types of advantages that can bring to your wallet such as:
- The upside potential:
The upside potential means that cryptocurrencies can offer a high profit margin due to high market volatility. In recent years, most cryptocurrencies have seen a large increase in demand, generating valuations of at least 400%. In the last 5 years it has already valued more than 4,200%.
- Privacy, animation and autonomy
Privacy, anonymity and autonomy is one of the most notable features of cryptocurrencies is that they are not controlled by an authority such as a government or financial institution. If you are afraid to give out too much personal data on the internet due to the high risk of identity theft. You have full control over your cryptocurrencies, from how to get them, where you want to spend them, to who you want to send them to due to their decentralized nature. So it becomes an ideal investment for your retirement or a trust fund for your children.
- Transfer with ease, speed and reduced cost:
Transferring easily, quickly and cost effectively in traditional trades, brokers and agents can add significant complications and expense on top of a simple transaction. The process in this branch of digital assets is very simple. Just click a few buttons and confirm the transaction. Payment can be received in real time and on top of that there are no fees or taxes, meaning you can withdraw everything very easily and without losing any money.
- Accessibility :Accessibility we can see from studies that there are currently 2.2 billion people in the world who have access to the internet or cell phones, but who do not have access to traditional banking systems and exchange. Peer-to-peer transfers can happen regardless of where you and the recipient are in the world. And in traditional transfers this took much longer.
Blockchain is a new means of innovation because if we are not directly investing in cryptocurrencies, we can invest in blockchain. Many companies are working on blockchain technology to build applications with various functions, such as preventing data theft and performing financial transactions.
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We also have an article that talks about “How to Invest in Cryptocurrencies” you just have to click here.