What Is Cryptocurrency

What Is Cryptocurrency

Simply put, a cryptocurrency is a type of digital currency that is fully secured through the usage of cryptography. As such, this cryptographic algorithm protects it and makes it nearly impossible to fake. 

Many cryptocurrencies are fully decentralized networks based on what is known as blockchain technology.

The blockchain is a distributed ledger that is enforced by a network of computers. This means that cryptocurrencies are not issued by any central authority, so they cannot be manipulated or interfered with by governments.

How Does Cryptocurrency Work

Different cryptocurrencies work in different ways; however, one of the most common ways is the Proof-of-Work (PoW) consensus algorithm. 

This allows nodes, known as miners, to take advantage of their hardware, such as graphics processing units (GPUs), and contribute to validating the transactions on the network. By validating a transaction, they are rewarded with a newly mined coin, and the transaction is confirmed. For Bitcoin, this happens every 10 minutes. The validated block of data is then added to a chain, and this is where it gets its name on the blockchain.

This online ledger has strong cryptography as a result and secures each of the transactions.

Cryptocurrencies are most commonly used to send digital currencies from one wallet address to another, or in other words, for transactional purposes. If you are wondering what a crypto wallet is, it’s a wallet that stores your private and public keys where you can receive crypto and send crypto from.

Most Popular Cryptos

The cryptocurrency market is varied, and if you want to buy cryptocurrency, you might want to be aware of the best cryptocurrency to invest in. If you want to engage in cryptocurrency trading, here is the cryptocurrency list you have been looking for.

Bitcoin

Bitcoin is the first cryptocurrency ever invented. It was released in January of 2009 by an anonymous person or group of people known as Satoshi Nakamoto. As we explained earlier, this is a currency with no physical coins. All of its balances are kept on a public ledger that anyone can access, known as the blockchain.

Bitcoin is the first cryptocurrency to truly get widespread popularity as well as success. 

Ethereum

Ethereum is more than just a cryptocurrency. It is a fully decentralized, open-source, and distributed computing platform. It was founded in 2013 by programmer Vitalik Buterin, and it went live on July 30, 2015. It stood out from the others because it enabled the creation of smart contracts and decentralized applications or dApps. Ethereum led to the creation of other altcoins that use its technology. Currently, it is one of the best cryptocurrencies to invest in.

Tether

Tether is quite a unique cryptocurrency because each of its crypto coins is backed by an equivalent amount of traditional FIAT currencies such as USD or EUR. These are then held in a designated bank account. Tether was launched as RealCoin in July of 2014 before being rebranded into Tether. 

Cardano

Cardano is a blockchain platform developed explicitly to allow the creation of decentralized applications or dApps. It is also a multi-asset ledger. It uses a proof-of-stake consensus model, where the holders of the ADA cryptocurrency, the network’s native cryptocurrency, can help in its operation and vote on the changes to the software rules.

Dogecoin

Dogecoin was created as a joke in 2013 by Jackson Palmer and Billy Markus and is an open-source cryptocurrency based on Litecoin. In other words, it uses the same technology as Litecoin, which is a proof-of-work (PoW) consensus model. 

It has been the topic of a lot of news lately. This, coupled with the fact that it has one of the most loyal communities of supporters out there, led to a surge in price. In late Spring 2021, DOGE went from $0,004 to around $0,7. 

How Can You Invest in Crypto?

If you want to invest in cryptocurrencies, there are many cryptocurrency exchanges and brokerages that will allow you to do so. But which one should you use?

We have the answer. Our crypto exchange comparison platform will help you pick the right brokerage for your specific needs. All you have to do is answer a few questions (it only takes a couple of minutes, we promise), and our algorithm will then do its magic, instantly showing you which exchange gives you the best chances to succeed as a trader. Try it now!