There has been a lot of hype generated lately about the term ‘cryptocurrency’ and in particular ‘bitcoin’ but what exactly is it and what is it used for? Let’s take a look below to get a basic understanding of what it’s all about.
Cryptocurrency is digital money that does not exist in a physical form which means you can’t carry them around with you or see them in real life. They only exist in a digital environment online and you can only gain access from a computer or some sort of mobile device.
Cryptocurrency networks are based on a peer-to-peer network where transactions are regulated and verified which helps minimize fraud and keeps them safe from the prying eyes of the government which is why trading in electronic currencies is sometimes associated with criminal activity.
Peer-to-peer networks operate by way of users passing over cryptocurrencies directly to other users which is not regulated by any central bank or government institution. The transaction is recorded in the public ledger of the network and is available to see for every user of the network. This technology is commonly known in the cryptocurrency community as “Blockchain Technology” This simply means that it is decentralized and not controlled by one single entity.
You don’t have to supply your personal details when dealing in cryptocurrency such as your name, address or date of birth and your account is created based on the allocation of a ‘public key’ and a ‘private key’ which acts like a username and password when accessing your online banking system .
As was mentioned earlier, Bitcoin is the most famous of the cryptocurrencies and is known for its volatility and potentially huge profits. If you were lucky enough to buy just one bitcoin in 2011 for $1, by 2017 that same coin was worth $20,000 which is a huge return by anyone’s means! Such scenarios are making cryptocurrencies more popular by the day as traders jump on the bandwagon to take a piece of the action
Although the use of cryptocurrencies has not yet become mainstream with regards to making payments for goods, the launch of Facebook’s Libra currency this year is set to change all that. Libra will allow billions of users to make financial transactions across the world using one of the many applications connected to the Facebook empire such as Whats App and messenger.
For traders interested in trading cryptocurrencies such as bitcoin, there are many reputable brokers who can help with this and one such broker which is fully licensed and regulated by the various government authorities is FIBO Group where you can open an account and begin trading with cryptocurrencies in no time.
Visit their website to find out more information.
Image by MichaelWuensch from Pixabay
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