Cryptocurrency’s been drawing attention for more than a decade. This kind of virtual money works due to encryption and advanced mathematical operations.
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What is cryptocurrency
Cryptocurrency is just a kind of currency that is stored only digitally and is secured with the use of cryptography. What’s special about it is that it doesn’t need to be issued by any regulating authority. Instead, there is a decentralized system, which issues new units and records transactions.
There is also another type of cryptocurrency, which involves the use of artificial intelligence. The most popular crypto AI coins are Ocean Protocol, Numeraire and Fetch.
How cryptocurrency works
Cryptocurrency can’t be used in our daily life, for example when we go shopping. It’s stored in our digital wallet and can be used only for online transactions (not all of them). Their verification is possible due to encryption – hence the name.
Currency holders can hold and update a record of transactions thanks to a distributed public ledger known as a blockchain.
It may be difficult to imagine how cryptocurrency units are created. While it’s relatively easy to understand how banknotes are printed, the idea of creating virtual money can be tricky. It takes computer power, which is used to solve specific mathematical problems. Such actions generate digital coins.
What you should know about cryptocurrency
Although the basic idea behind cryptocurrency is clear, people have a lot of doubts and questions. Among others, they are concerned about safety. No matter what kind of investment we want to make, we are more or less exposed to being cheated. The crypto market attracts a lot of frauds and con artists. If you’re not careful enough you can come across fake websites which at first glance seem legit. Their authors may try to convince you to invest and promise that you’ll multiply your capital in a short time.
What also interests people is what exactly you can do with your cryptocurrency if you don’t plan to sell it. For example, you can spend your crypto coins on luxurious goods such as Rolex watches or extravagant cars. Of course, such options are very rare so you can’t use your crypto wallet to do your regular shopping.