What Are Cryptocurrencies: All You Need To Know In 2018

What are cryptocurrencies? Well…

Some know them as the 21st-century unicorn, and others refer to them as the ‘money of the future’. There are even people that think of them as an investment – and ones that make money on cryptocurrencies via trading.

Whatever your goal is, you should understand cryptocurrencies in detail before you start working with them. Nowadays, cryptocurrencies have become a global phenomenon. Even banks, governments, and many big companies got involved and are aware of their importance.

“Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.” – Thomas Carper, US-Senator

2018 is a year where more and more countries are regulating cryptocurrencies – and more banks are doing the same after a lot of research and published papers. Still, beyond all this noise, the best way to define what are cryptocurrencies is through this definition.

“Any form of currency that exists digitally and that usually has no central issuing or regulating authority. Instead, one that uses a decentralized system to record transactions and manage the issuance of new units – and one that relies on cryptography to prevent counterfeiting and fraudulent transactions.”

In other words, cryptocurrencies are limited entries in a database that no one can change without fulfilling specific conditions. Instead of being government-issued (fiat), these currencies are created digitally by mining. Speaking of, mining requires the use of complex computers solving mathematical operations via programs. This is how cryptocurrencies are created.

There are many things that one can do with cryptocurrencies. From buying goods to services, investing or trading, the value of cryptocurrencies is constantly rising. However, it is safe to say that most cryptocurrencies are high-risk investments thanks to their price fluctuations and unregulated identity.

If you decide to invest in cryptocurrencies, check out Bitcoin – as it is the leading one and the most dominant cryptocurrency. In 2018, knowing what are cryptocurrencies can set you apart from many people – or even give you a chance to become richer, if you make the right moves.