Not many people knew cryptocurrency existed not until the value of bitcoins hit $19,000 in 2017. This lead to an increase in people’s attention to cryptocurrency and how they work. Today it is common to find businesses accepting cryptocurrency as a form of payment.
What is Cryptocurrency?
Cryptocurrency is a form of currency or an asset that can change ownership from one person to the other online. Most cryptocurrencies are decentralized which means that they are not made, distributed or even controlled by any single organization.
The value of cryptocurrencies is affected by its demand and supply. This makes cryptocurrencies a good investments for people who like speculating.
How do they work?
Cryptocurrencies are made and maintained through a process known as mining, with the help of other people in the network known as miners. Miners verify every transaction by solving an algorithm and include them to a public ledger known as a blockchain.
Every transaction block is unique and only matches a previous block in the chain. This has created transparency and trust throughout the network. It is hard to duplicate or counterfeit a cryptocurrency unless the algorithm in the whole blockchain is edited something that is difficult and time consuming to accomplish.
Each miner that solves an algorithm is rewarded using a cryptocurrency, this has increased competition between miners. Mining and solving equations in the blockchain is a difficult task, therefore miners now need to use special hardware known as rigs and software to help them mine easily. To make things easier miners do come together to solve a block chain then they share the reward.Where and how can you get cryptocurrencies?As stated above counterfeiting a cryptocurrency is very difficult therefore getting them through the back door is next to impossible. However there are several legit ways of acquiring bitcoins.
Below are some ways you can get them easily.
- Exchanging goods and services for them. Cryptocurrencies are just like any other currency, you can earn them by selling goods or services and receiving them as a mode of payment. Because most of them are universally accepted mode of payment you can earn them regardless of your nationality or where you are.
- Buying them from an exchange bureau. There are companies that sell and buy cryptocurrencies for profit, this is a very straight forward way of acquiring them. To ensure you are not conned your money it is advisable that you buy them from companies that have a good reputation and have been there for a while.
- Gambling. Cryptocurrencies have been offered in some games as a reward after winning a game or competition.
- Mining is a very popular and easy way of earning them.
However, it is expensive and time consuming to mine them especially if you don’t have the right equipment.
What are the benefits of owning cryptocurrencies.
More people are now seeing the benefits of using them in their day to day life, it is more convenient and
profitable than regular currencies since their value can grow faster than regular fiat currencies.
With cryptocurrencies you can send money to anybody anywhere around the world faster without necessarily going through a lot of procedures. Furthermore there is no transaction cost you will incur as you send or receive money.
Since the whole network is not controlled by anyone an individual’s identity is not a requirement as you send or receive money. This safeguards the privacy of people in the network.
Most of their networks are completely secure and open to everyone in the network. This makes it difficult to
counterfeit a cryptocurrency without being noticed by the entire network thus protecting those in the network from fraud.
Even though cryptocurrency has attracted the attention of the world, it still faces a lot of challenges. Lack of information on crypto currencies is a big problem.
The other challenge is that even though cryptocurrency may be the future, economist discourage people from investing in them. With lack of a legislation that controls cryptocurrencies being the main reason.