What Is Cryptocurrency? Simple Guide for beginners

As technology moves forward, it unfolds lots of opportunities ahead. The cryptocurrency (or “Crypto”) world is becoming more advanced and attractive to people worldwide.

Despite the fact that Cryptocurrencies have been around for 10 years already, some people still have fear of getting into Crypto. Usually, the main reason seems to be a lack of proper guidance and understanding.

There are thousands of different articles about Cryptocurrencies. Most of them are stuffed with random charts and sentences which make zero sense, leaving the real question unanswered: What is Cryptocurrency?

What is Cryptocurrency?

cryptocurrency for dummies

Firstly, Crypto is a digital currency. Which can be exchanged online for different goods and services. For example, take casino chips. They have a financial value that can be exchanged for the original currency.

Secondly, Cryptocurrencies work with the help of a technology called Blockchain. Simply said, Blockchain is a decentralized network that runs all around the world using lots of computers to process and record transactions.

Thirdly and most importantly, one thing that attracts the most recognition is security. Knowing how to store your coins properly, makes your holdings be kept in a much more guarded way than in the biggest and most competent bank in the whole world.

While there is no reliable data on this for the current year, data breach statistics from 2018 show that over 2.5 billion accounts were hacked in that year. That amounts to roughly 6.85 million accounts getting hacked each day or 158 every second.

Knowing how to store your cryptos will put you ahead of the game. It will ensure your money is safe and inaccessible by others.

How many Cryptocurrencies are there? How to calculate each’s price?

cryptocurrency guide

According to data from CoinMarketCap, more than 7,800 different cryptos exist today. Price varies for each Crypto. Currently, the largest Cryptocurrency is Bitcoin (54,900 $) with the biggest market cap.

The price of each coin depends on its market cap and the total amount of coins in circulation(Circulating Supply). If you want to calculate the price of the coin, simply divide its market cap by its circulating supply.

For example, 18,633,131 Bitcoins exist nowadays. It’s total market cap equals to 1,023,030,209,517 $. Divide BTC’s market cap by its circulating supply. It is roughly 54,900 $, giving you the current price of a coin.

What is Cryptocurrency Mining?

Cryptocurrency mining is the process in which transactions between users are verified and recorded in a Blockchain ledger. It also encourages Cryptos to operate in a peer-to-peer network without needing a third-party authority.

The mining is also responsible for new digital coins entering the market circulating supply. Bitcoin and Ethereum are clear examples of the miners’ existence significance. Without this technology, none of them would be acquirable.

Some might say that mining is expensive and inefficient. It depends which coin you are mining and what kind of set up you have.

Let’s take Ethereum(GPU) mining for example, when it first began the results where pretty rewarding. It’s still is but not the same way it used to be.

You just need to adapt to the time changes, trends that work and are in early-development.

Keep in mind that before you get involved with any kind of mining we suggest you to do your due-diligence.

In Crypto you can’t eliminate the risk, however you can minimize it by doing the proper research beforehand.

Currently we are looking up to the Helium(HNT) network and believe it’s going to be big soon.

If you’re interested in reading more, then check our article about HNT coin and Helium mining.

What is the mission of Cryptocurrencies?

The mission of most Cryptocurrencies is one: To make our lives easier.

If you look into the current financial structure, it has many flaws, such as inflation, lack of security, lack of anonymity and etc.

Cryptocurrencies are missioned to fix all those flaws that today’s system has. By making transactions and other activities reliable, faster, cheaper and more stable.

Once you become the owner of any kind of crypto you automatically become an important part of the market. As mentioned millions of people own cryptocurrency, making it almost impossible to manipulate the prices.

For example, let’s look at Bitcoin. Several million people own this coin. Therefore, it is almost impossible for a certain groups of people to speculate the market and gain control over it, making the interaction with Bitcoin safe and reliable.

Conclusion

In conclusion, Cryptocurrency world is in it’s early stage of development. No, you are not late to the party. Day by day, technologies become more refined. Involvement in Cryptos will not only affect your financial gains, but also play the large role in the mentioned process.

There are a lot of things to keep an eye on. We will be discussing many aspects in detail further on our blog. If you are planning to invest in Cryptocurrency and do not know where to start, read the following article: How to Invest in Cryptocurrency 2021

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