what is crypto or digital currency and how it works

 what is crypto or digital currency and how it works

What is cryptocurrency?

Cryptocurrency is just like a digital form of cash. You can use it to pay friends for your bar tabs, buy the new socks you’ve been looking for, or book flights and hotels for your upcoming vacation. Starting with… Because cryptocurrency is digital, it can be sent to friends and family anywhere in the world.

Just like PayPal or bank transfer, right?

Well, it really isn’t. It’s so much more fun!

As you can see, traditional online payment gateways are institutional. They keep your money for you, and when you want to withdraw it you have to ask them to move it themselves.

With cryptocurrencies, there is no organization. You, your friends, and thousands of other free apps can work as your own group. Your computer connects to other people's computers, which means you can communicate directly - no intermediaries!

To use cryptocurrency, you do not need to sign in to a website with an email address and password. You can download various applications to your smartphone within minutes to start sending and receiving.

Therefore, this magic internet currency is impersonal and uses cryptography to secure the system. But you already have apps that pay people - so why bother?

5 Is your friend or family member talking about bitcoin? This is the original and, still, the most popular cryptocurrency.

Bitcoin has provided the basis for many other cryptocurrencies. Some were taxpayers on the same program, while others did very different things. Okay, but what is the difference between all cryptocurrencies?

It will take us weeks to list all the different cryptocurrencies. Some are fast, some are private, some are more secure, and some are more programmatic.

A common saying in the cryptocurrency space is: Do your own research (or DYOR). We don’t talk about being corrupt, we promise. It just means you don’t have to get information from anywhere right.

In the next section, we will discuss the technology that underpins most digital currencies, known as the blockchain.

What is a blockchain?

Don't be afraid to use tech-savvy people to describe "blockchain." Blockchain is just a database. It's not too complicated - you can do it in a spreadsheet with very little effort.

There are some advantages to these databases. The first is that only blockchains are listed. This means you can still add information - you can't click into a cell and remove or edit the content you added earlier in any way.

The second is that each entry in the database (called a block) is cryptographically associated with the last entry. In plain language, each new entry must have some kind of fingerprint (hash) of the last one.

And that is! Since each fingerprint copies the last one, you end up with a chain of blocks. Or, as the kids like to call it, the blockchain.

Blockchain is immutable: if the blockchain changes, its digital footprint changes. And as the fingerprint is entered in the next block, the next block will also change. And since that fingerprint is... well, I get the point. You end up with a ripple effect where every change is visible. No information can be changed without paying attention to all of them.

Is this the case?

Are they less painful? It is a frank innovation that here is not a difficult alternative to Google Sheets. It is that anyone can download blocks from other people on the network to create mirrors of the blockchain on their own computers. This is what the program described above does.

Imagine that you and your friends were using Alice, Bob, Carol, and Don. You could say, "I want to send Bob five coins." So you send these instructions to everyone, but the coins are not sent directly to the class.

Carol can simultaneously decide to send five coins from Alice. It also sends instructions to the network. At any time, the participant can send instructions to create a block.

If someone can prevent it, what stops him?

You may find it more appealing to create a block that says "Bob costs me a million dollars." Or start buying Carroll's Lamborghinis and fur coats with money he doesn't have.

Well, that's not the case. Thanks to some coding, game theory, and something called a probability algorithm, the system prevents you from spending money that you can't.

Do you already know all that and just want to learn how to trade or invest? Let's get to that later.

do business

As you know, blockchain and cryptocurrencies are already used in many different fields. There is no doubt that measurement is one of the most used tools today.

Business usually means short-term ways to make a profit. Traders can enter and exit the websites at any time. But how do they know when to enter and exit?

Technical analysis (TA) is one of the most popular ways to understand the cryptocurrency market. Technical analysts look at the price history, charts, and other types of market data to find the terms that have the best earnings performance.

You have to die to start immediately. And technically, you can. It is easy! However, there are many things worth looking for, and the work is hard! It will take us a long time to cover all the things you need to remember.

investment

Investors seek long-term terms based on basic investment principles. For example, the amount of profit the company makes. Although cryptocurrencies are a new and unique type of asset, they can be viewed through a similar lens.

Many bitcoin investors follow the "HODL" philosophy. This means that they believe in the success of Bitcoin so much that they have no plans to sell it in the long term. But don't take their word for it! Read our comprehensive Bitcoin guide and decide for yourself.

After that is done, you can decide if you want to become a Bitcoin HODLer. Well, you can become one in minutes. Simply go to the Buy Cryptocurrency page and follow the instructions.

The boarding process is smooth and fast. You don't even have to jump much. You can start with as little as 15! So what are some brain candy you should consider when investing in cryptocurrency?

passive income

So far, we've talked about trade and investment. These methods usually take a long time, which not everyone has. If you are one of those busy but competent people, we have other options for you.

As Warren Buffett, one of the most successful investors of all time said: "If you don't find a way to make money while you sleep, you will keep working until you die."

The good news is that the cryptocurrency world offers many opportunities for passive income. You can basically use your own encryption to make it even more corrupt!

Why doesn't everyone do that? Well, maybe they don't know. But you do now!

One way to earn passive income is to safely lend your assets to other people. They will pay you interest for the opportunity to borrow your money.

Also, you may have heard of bitcoin mining. This usually involves a lot of high and expensive bitcoin rewards machines. However, there are other ways to secure the cryptocurrency network. One of them is through a process called Stakeout. And spoiler alert, it does not include meat.