Confused About Cryptocurrency? An Introduction to the Basics

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Cryptocurrency is something that is widely spoken about nowadays, but for many people, the term ‘cryptocurrency’ is something of a mystery. Cryptocurrency may seem like a new concept, but it has been around for over ten years and first became available to the general public in 2009.

What Makes Cryptocurrency Different from Regular Money?

Much of the mystery surrounding cryptocurrency is caused by the fact that it exists online and doesn’t conform to many established ways of handling money. Cryptocurrency’s most significant difference is, for many, its most appealing feature. Rather than being centrally controlled in the way that banks are, cryptocurrency does not need financial institutions and is entirely decentralized. No one person owns or controls cryptocurrency. If you start to trade in cryptocurrency, you do not need to provide identification or prove who you are; you can remain entirely anonymous. This means that you won’t receive an account number or any of the other recognizable conventions involved in dealing with traditional financial institutions.

What is Bitcoin?

When it comes to discussing cryptocurrency, the first currency you will think of is likely to be Bitcoin. Bitcoin has been available to the public since 2009. However, it rose to prominence in 2017 when its value peaked.

Bitcoin is widely regarded as the first cryptocurrency, and while there have been other digital currencies in the past, none of them has enjoyed the same success as Bitcoin. This success is likely to be because of the unique decentralized approach used by Bitcoin, which utilizes Blockchain.

What does Blockchain Mean?

Your banking and personal details would be held on record and stored on a central server in a bank or other traditional financial institution. The server would also keep details of your purchases and any transactions that you have made. As Bitcoin is decentralized, using a central server to store personal information is not an option. Instead, Blockchain is used. Blockchain is a public ledger of each person in the network’s transactions, but instead of using their name, their wallet addresses are included. Using this method prevents double payment from occurring.

What can Cryptocurrency be Used For?

Cryptocurrency can be used in many ways; here are some of its uses:

  • Investment
  • To make purchases
  • To accept payments
  • Mining

Mining cryptocurrency can be incredibly lucrative and is an excellent way to get involved in the popularity of Blockchain. To successfully mine cryptocurrency, you need the right tools for the job. If you are interested in mining cryptocurrency, why not learn more about the equipment necessary to make it a success. You can get quotes here to help you to decide on the right equipment package to suit your requirements.

What are the Benefits of Mining?

Mining cryptocurrency such as Bitcoins is complicated, which is why specialist mining equipment is used to do this. Mining a Bitcoin involves a computer using power to solve a complicated maths puzzle. However, when a new Bitcoin is created, the miner is rewarded for their efforts and awarded Bitcoins.

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