23 October 2021
By Roger L Jones
roger@TheCork.ie
Entertainment
Cryptocurrencies have grown in popularity a great deal in recent years. Far from being a niche, fringe interest, cryptocurrencies have now gone mainstream, and the popularity of cryptocurrencies is not set to dimmish anytime soon. So whether you already have some Bitcoin sitting in your digital wallet, you are interested in trading cryptocurrencies, or simply want to learn more about cryptocurrencies, this guide is here to help.
What is a Cryptocurrency?
Cryptocurrency is a term that is used to describe any form of currency that is both digital and decentralised. Cryptocurrencies are completely digital; they are held in a digital wallet and sold, bought, or exchanged online.
There are thousands of different cryptocurrencies out there; some of the most famous include Bitcoin, Dogecoin, and Ethereum. Bitcoin was created back in 2009 and was the original cryptocurrency. Each cryptocurrency offers its own benefits and serves its own purpose; some are designed to replace cash, while others have been created to be used for private and untraceable transitions.
One of the most important factors about cryptocurrencies is that they are deregulated, which means that, unlike most currencies, they are not backed by a central bank. This means that the values of cryptocurrencies are completely determined by their users.
What are Cryptocurrencies Used For?
While cryptocurrencies are a form of digital currency, they cannot yet be used in completely the same way as standard currencies. For example, while cryptocurrencies can be used to buy or sell items, they are not accepted by all stores. However, there are some industries in which cryptocurrencies remain the solution of choice. For example, as jackpotcitycasino.com Ireland explains, some people choose to use cryptocurrencies when playing online casino games.
Many people also choose to use cryptocurrencies as an alternative investment. You are able to buy and trade cryptocurrencies in the same way as any public stock. However, in a similar manner to the foreign exchange (forex), there can be significant risks that are involved when you are making investments in a largely unregulated market.
Important Cryptocurrency Terminology
The list below outlines some of the most important cryptocurrency terminologies that everyone should be familiar with.
Blockchain
A blockchain is a database that stores cryptocurrency’s digital transaction records.
Decentralised
This term describes the context in which cryptocurrencies are operating, specifically referring to the fact that the environment of cryptocurrencies is not regulated by a central bank or financial institution.
Bitcoin
This is the first and most popular form of cryptocurrency.
Altcoins
This term is used to describe any type of cryptocurrency that is not a Bitcoin.
Exchange
This is the name for a marketplace that is used to buy or sell cryptocurrencies.
Wallet
This is the location in which you store the cryptocurrencies that you own.
Distributed Ledger Technology
Distributed ledger technology, otherwise known simply as DLT, is a decentralised digital record. Unlike other traditional, databases a DLT does not have a central authority.
Cryptocurrencies have been a hugely popular solution for a range of different purposes. However, as more and more people worldwide are interested in using and trading cryptocurrencies, it is increasingly important to understand the basics of what they are and how they work.
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