We are going to explain what exactly cryptocurrencies are so that if you have heard of them in general or of a specific one such as Bitcoin, you can know what exactly it is about. It is a type of digital exchange medium that has been with us for more than a decade, but it has been in recent years that its fame has increased the most.
In addition to explaining what they are, we are also going to try to briefly and simply explain how they work internally, as well as mentioning some of the others that currently exist and that you are hearing about.
What is cryptocurrency?
Cryptocurrencies, also called cryptocurrencies or crypto assets, are a digital medium of exchange. It fulfills the function of a coin, and that is why they are known by that name. It is, however, an entirely digital thing, using cryptographic methods to secure your financial transactions, control the creation of new units, and verify the transfer of assets.
Therefore, we can consider them as a decentralized alternative to digital currencies. With the term “decentralized” we mean that these currencies are not controlled by a single service or company. The same happens with conventional currencies, centralized and organized by entities and banks, so they are the opposite method to both.
The first cryptocurrency was Bitcoin created by “Satoshi Nakamoto”, a pseudonym that corresponds to a person who nobody knows exactly who he is. This person published an article in 2009 in which he described a P2P payment system that he called Bitcoin. After a few months, he published the first version of the software that allows managing the currency network and begins to interact in forums with the first interested parties.
Sharlene Meriel is an avid gamer with a knack for technology. He has been writing about the latest technologies for the past 5 years. His contribution in technology journalism has been noteworthy. He is also a day trader with interest in the Forex market.