Crypto - What are cryptocurrencies?

What are cryptocurrencies and how do they work? We are going to explain to you what exactly cryptocurrencies are, so that if you have heard of them, you can know what they are all about. They are a type of digital medium of exchange that has been with us for more than a decade now, but in recent years it has been increasing its fame to a great extent. Bitcoin, Ethereum or Dogecoin are some of the most famous cryptocurrencies and their popularity, thanks to blockchain technology, has caught the attention of the whole world. We will analyze what they are, how they work, why they have been an unprecedented technological/monetary revolution and how to store them securely.

What are cryptocurrencies? Cryptocurrencies, also called virtual currencies, cryptocurrencies, or cryptoassets, are a digital medium of exchange. They fulfill the function of a currency, and hence they are known by that name. However, they are entirely digital, using cryptographic methods to secure their financial transactions, control the creation of new units and verify the transfer of assets.

Therefore, we can consider them as a decentralized alternative to the government money we all know and use on a daily basis. By “decentralized” we mean that many of these currencies are not controlled by any central server of a government, bank or company. Unlike conventional currencies, which are centralized and organized by entities, banks and governments.

This decentralized system works through blockchain technology, also known as blockchain, where each network agent guarantees the security and balance of transactions, moving away from the model of traditional central banks.

In this way, cryptocurrencies eliminate the role of the intermediary in all transactions, speeding up each process within a network in which all users ensure the proper functioning of the network. Another thing you should know is that the value of each cryptocurrency is variable, and that in recent times there is a speculation similar to stock market assets. Therefore, there are many people who are creating wallets on platforms (Exchanges) where they can buy cryptocurrencies, to sell them later and thus earn money.