David Morgan

Cryptocurrency in simple words is electronic virtual or digital money. Physically, this coin does not exist, there are only special electronic registries that keep records of how much cryptocurrency users have and who transfers it to where. These registers are called blockchains.

Cryptocurrency is stored in an electronic wallet. Anyone can install such software as the Bitcoin up app on his 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 non-cash payments

The way cryptocurrencies work, in simple terms, is similar to the way cashless payments are arranged in banks: when you pay with a card in a store, you don't give anyone any physical money or gold either. It's just somewhere in the bank register that your transaction is recorded, your account has a number that decreases and a second one that increases.

Difference from conventional currency

Cryptocurrencies are different from the usual currency in that the registries are not stored centrally in the banks and payment systems, but are stored simultaneously on all computers of users, who installed a special software. This means that it is possible to find out everything about when and how much cryptocurrency has been used throughout its history.

There are currently over 1,000 different types of cryptocurrencies based on different technologies and created for different purposes. Not all of them become leaders or somehow interest investors at all, however, if an altcoin has an idea or is supported by some large company, then there are a lot of prospects for the coin.

Advantages of cryptocurrencies

Your cryptocurrency account cannot be blocked, unlike accounts with other payment systems and banks;

You can use such an account anywhere you wish;

Anonymity and transparency of transactions - all transactions are visible in public logs, but user names are not disclosed;

Your account is not tied to your personal information. But this can also be a disadvantage of cryptocurrency.

The developers of cryptocurrencies managed to come up with a scheme where the problems associated with the services of intermediaries, such as a bank or a payment system, are completely removed. This is achieved by the technology, where each user can directly transfer money to another user of the system without commissions and overpayments.