What is crypto-currency in simple words?
Crypto-currency is electronic virtual or digital money. Physically, this coin does not exist, there are only special electronic registers where it is accounted how many cryptocurrency users have and who and where transfers them. These magazines are called blockchains.
HOW DOES CRYPTO-CURRENCY LOOK?
Crypto currency is stored in electronic wallet. Anyone can install this software on his/her computer. The address of such a wallet, depending on the type of digital coin and its technology, is a set of several Latin letters and numbers. It can also be represented as a QR code.
ANALOGY WITH CASHLESS PAYMENTS
The system of crypto-currency work is similar to how non-cash payments are made in banks: when you pay with a card in a store, you also do not transfer any physical money or gold to anyone. Simply somewhere in the bank register your operation is recorded, the figure on your account decreases, and it increases on the other.
DIFFERENCE FROM THE USUAL CURRENCY
Crypto currency differs from the usual currency in that registries are not stored centrally in banks and payment systems, but simultaneously on all users’ computers who have installed special software. This means that you can find out everything about when and how much crypto-currency has been used for the whole history of its existence.
TYPES OF CRYPTO-CURRENCIES
At the moment, there exist more than 1000 different types of crypto-currencies, based on various technologies and created for different purposes. Not all of them become leaders or even somehow interest investors, however, if the altcoin has an idea or is supported by some large company there are many prospects for the coin.
- your crypto-currency account cannot be blocked, unlike accounts in other payment systems and banks;
- you can use this account anywhere you like;
- anonymity and transparency of transactions – all transactions are visible in a public log, but the names of users are not disclosed;
- your account is not bound to your personal data. The truth is the same thing can become a disadvantage of the crypto-currency.
- risk of losing money when exchanging crypto-currency, because the activities of exchange platforms are not regulated;
- the price of any crypto-currency can change significantly in a very short period of time, sometimes the coin can depreciate completely, and nothing can prevent it, since it is not bound to any official state currency;
- consumers who use crypto-currency for payments for goods and services are not protected with the state standards that provide the return of funds if they are discharged as a result of an unauthorized transaction;
- stolen crypto-coins are almost impossible to return, because transactions are anonymous;
lost codes from the wallet cannot be recovered.
THE BASIC ADVANTAGE:
Developers of crypto-currencies managed to come up with a scheme where the problems related to the services of intermediaries, such as a bank or a payment system, have been completely eliminated. This is achieved by technology where each user can directly transfer money to another user of the system without fees and overpayments associated with third-party services.
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