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What is cryptocurrency and who created it? 

“Cryptocurrency” is the money used in digital form. It can be bought, sold, sent, and received without ever touching an actual piece of paper or coin. It exists only online through software called cryptowallet that is available for everything from desktop computers to smartphones to tablets. Cryptocurrency has taken hold in various parts of the world because it’s fast, secure and anonymous (the creator of Bitcoin who goes by the name “Satoshi Nakamoto” does not exist publicly), but mostly because traditional methods like banks are creating more problems than they do good.

Cryptocurrency was created in 2009 by pseudonymous developer Satoshi Nakamoto, who is thought to be a man living in Japan.

What purpose does cryptocurrency serve?

Cryptocurrency is used to make purchases, sell goods and services and for investment. Cryptocurrencies like Bitcoin and Litecoin (an altcoin) can be bought and sold on exchanges like Coinbase, which was founded in 2012. The value of both Bitcoin and Litecoin rose from under $0.01 per coin in late 2012 to over $1,800 by early 2017. One Litecoin currently costs $76.70 or $0.01433 per coin at the time of publication.

The idea behind cryptocurrency is to create a whole new, global economy. The vision for this economy is one that runs completely on cryptocurrencies, meaning that no government will have any control over the money in it. This means that if a government decides to create or lower taxes or print more paper money, they can’t do so with cryptocurrency.

How does cryptocurrency work? 

Cryptocurrency works similarly to regular paper money in the sense that it has a value and can be used to buy goods and services. However, cryptocurrency exists only online and cannot be physically touched. There are over a thousand different types of cryptocurrencies out there, but Bitcoin has been the most successful at staying relevant in today’s society.

Here’s how to buy and sell cryptocurrency:

1. First, you need to set up a digital wallet. This is a piece of software that can be used on your desktop computer or smartphone and allows you to store and transfer cryptocurrency. Here’s a list of the different types of wallets you can choose from:

2. Once you’ve installed your digital wallet, you’ll need some sort of fiat currency (USD, EUR, GBP) in order to buy cryptocurrency. A “fiat currency” is money that has been printed by a government like USD or BTC (Bitcoin). Cryptocurrency like Bitcoin and Ether (another altcoin) cannot be created by governments because it’s not physical money.

3.Next, you’ll need to find a “crypto exchange” (or simply “exchange”). Exchanges like Coinbase will also link you up to your fiat currency bank account. Here’s a list of popular exchanges:

4. Once you’ve connected your bank account, you’ll be able to buy cryptocurrency like Bitcoin and Litecoin. You can buy and sell them on exchanges like this:

5. Once your coins are in your wallet, you’re good to go! You can withdraw them to an external hard drive or transfer them directly into another wallet (if yours breaks). 

Here’s a list of the types of wallets you can choose from:

1. Desktop wallet – a piece of software that runs on your desktop computer or laptop. When you’re using a desktop wallet, it’s almost as safe as being offline, but you’ll need to update it regularly with the newest version of the software.

2. Web wallet – a piece of software that runs online on a website. When you’re using a web wallet, it’s almost as safe as being offline, but you’ll need to update it regularly with the newest version of the software.

3. Mobile wallet – a piece of software that runs on your mobile device (smartphone or tablet). A mobile wallet is the riskiest because it can be hacked if you don’t use two-factor authentication.

What is cryptocurrency mining? 

Cryptocurrency mining is the act of using highly advanced computers to solve difficult mathematical puzzles in order to make more cryptocurrency like Bitcoin and Ether (another altcoin). Cryptocurrency mining only makes sense if you live in a country where electricity is extremely cheap, so people in places like Iceland and China have established huge “crypto farms,” or warehouses full of powerful computers that mine 24/7 to create more currency. Some people have spent over $30,000 on a single computer rig designed specifically for mining cryptocurrency.

What do I need to start mining cryptocurrency?

There are four main things you’ll need to start mining cryptocurrency:

1. A powerful computer (Bitcoin miners use specialized computers called “mining rigs”). Mining rigs are extremely powerful, making them the most expensive. The most common type of mining rigs can produce up to $1 million in profit per year, so they’re definitely not for the faint of heart. If you want to start mining cryptocurrency, you’ll need at least $10,000. The only way you can tell how much profit your computer will be able to produce is by using special software that’s called a “bitcoin profitability calculator.” Here’s a list of the best bitcoin profitability calculators:

2. A dedicated cooling solution. Current mining rigs are so powerful that they need to be super-cooled so the computers don’t overheat. That means you’ll need to buy something called “mining air conditioning” to keep your computer cool while it’s being used.

3. A powerful internet connection. Mining cryptocurrencies are running algorithms 24/7, and to do this, they require a lot of data (think of all the torrent clients your computer downloads every day, only much more intense). To make sure you get enough data, you’ll need to get a high-speed internet connection (broadband is recommended).

4. Specialized computer hardware. Mining cryptocurrencies will require a lot of computing power, so you’ll need special computer hardware to do it. To see how powerful your computer is, you can run a benchmark test with software called “CGMiner.”

Advantages of cryptocurrency: 

1. It’s decentralized. Cryptocurrency is a peer-to-peer network, which means that there’s no central bank or government that controls it.

2. Transactions are much faster. In order to send money from one place to another using cryptocurrency, you don’t need to go through a bank or any other financial institution – you simply send it directly from one person to another. This is much faster than traditional bank transfers, which can sometimes take days to complete!

3. It’s more secure than regular banking methods.Instead of storing your money in a “bank,” bitcoin and cryptocurrency wallets can be stored on a piece of paper or a flash drive instead. With cryptocurrency, there’s no third party that can screw you over, which is why it’s often referred to as a “crypto-anarchist” currency.

4. It’s borderless. Today, cryptocurrency transactions can happen anywhere in the world without any middlemen like banks or governments getting involved.

5. It allows anonymous transfers from individual to individual (almost). If you want to send money from one person to another using cryptocurrency, there will be a small fee attached called a “small transaction fee. “If you want to be completely anonymous, there’s a “no confirmations” option. 

Disadvantages of cryptocurrency: 

1. It’s extremely volatile – which makes it a bad choice for long-term investments . Cryptocurrency prices rise and fall every day, so it is a highly risky asset for investors who have short-term goals. This is why many financial advisors discourage their clients from investing in cryptocurrency.

2. Transactions are expensive – which makes price fluctuations worse if you use it as a means of payment . When you send money from one person to another using cryptocurrency, there will be a small fee attached called a “small transaction fee. “If you’re trying to send money to someone without any fee attached, there’s an option called “no confirmations. ”

3. It’s not easily divisible. Most cryptocurrencies are designed in a way that makes them very easy to divide into smaller units (the smallest unit is a “satoshi,” which is 0.00000001 BTC or 0.00000001 ETH). To make things easier, bitcoin and many other cryptocurrencies allow you to purchase fractions of a coin for lower fees. For example, you can buy 0.1 BTC for $0.30 instead of 1 BTC for $4,500.

Ultimatum

If you’ve ever thought about getting started in cryptocurrency, now is the time. We would advise you to start small and only invest what you can afford, and make sure you do your research before spending any of your hard-earned cash. To get started, check out the following cryptocurrency exchanges: Coinbase (free $10 in bitcoin if you spend $100), BTC Markets (free $10 in bitcoin) and CoinJar (free $20 in bitcoin). Good luck!


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Chanchal23

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