What are cryptocurrencies? All you need to know

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They are decentralized digital currencies that use blockchain technology to allow you to transfer cryptocurrencies with other users.

Different types of cryptoassets: “Bitcoin” and “Altcoin”.

They are primarily used to carry out financial transactions, but are also used as an investment due to their volatility and appreciation potential.



Before purchasing cryptocurrencies, it is important to research and understand the risks and volatility associated with this asset class, and diversify your portfolio.

There are several ways to buy cryptocurrencies, including buying coins directly, or investing in cryptocurrency-related companies.

If you are reading this article, you are probably wondering about cryptocurrencies. In this article, we will provide you with a detailed description of what they are and the important aspects you should know.

Cryptos are digital or virtual currencies that use cryptography for security . They are decentralized, meaning they are not controlled by any government or institution.

You can buy and sell these currencies on cryptocurrency exchanges ( CEX, DEX ) and you can also use them to purchase goods and services .

It is important to note that the use of cryptocurrencies is not yet regulated in many countries , making them a risky investment . Before using or investing in cryptocurrencies, it is important to do your research and understand the risks involved.

How do cryptocurrencies work?
Cryptocurrencies work by using a technology called blockchain , which, to put it simply, is a decentralized and distributed digital ledger that records all transactions .

Each transaction is grouped with others that have occurred in a specific period of time, usually about 10 minutes although it depends a lot on each network, into a "block".

These blocks are then added to a chain, creating a "blockchain." Each block in the chain contains a unique code called a "hash" that links it to the previous block, making it difficult to alter previous transactions.

When a transaction is made, it is broadcast to the entire network of users. These users, called "nodes", verify the transaction using complex algorithms to ensure that the sender has sufficient funds and that the transaction is valid.

Once verified, the transaction is added to the next block in the blockchain.

The process of creating new Ecuador Mobile Number List blocks, also called mining, is carried out by very powerful computers , called nodes or miners.

They solve complex mathematical problems to add a block to the blockchain and are rewarded with new cryptocurrencies.

What are cryptocurrencies used for?
You can use cryptocurrencies mainly as a form of digital currency that allows you to buy and sell goods and services . Some merchants and companies have begun to accept them as a form of payment, although they are not yet widely accepted.

You can also use them as an investment . Some people buy them with the expectation that their value will increase over time, while others may use them as a way to store value or as a hedge against inflation .

Another use case for cryptocurrencies is the creation of decentralized applications (DApps) and smart contracts .

How many types of cryptocurrencies are there?
Each cryptocurrency has its own characteristics and uses, and its popularity and value can vary greatly, except for stablecoins (USDT, USDC, BUSD) that are created to maintain their stable value over time.

Types of crypto
Bitcoin (BTC): is the first and best-known cryptocurrency. It was created in 2009 by an anonymous person or group of people under the pseudonym Satoshi Nakamoto.

Altcoin: is an alternative cryptocurrency to Bitcoin. That is, any currency other than Bitcoin is considered an altcoin.

Some examples of altcoin are Ethereum(ETH) , BNB , Ripple(XRP) .

There are different altcoins, we present the most important categories:
       


Stablecoins: These are designed to maintain a stable value, often pegged to a fiat currency or commodity. They are used as a store of value or medium of exchange. They are designed to maintain their stable value over time. Some examples of stablecoins are Tether (USDT) , USD Coin (USDC) , and Binance Coin (BUSD) .

Utility Tokens: Most tokens issued in the ICO space are utility tokens, which are primarily used by companies to generate interest in their products and to create value in the services offered in blockchain ecosystems. However, these do not grant property rights in a company.

Non-Fungible Tokens (NFTs) – Used to represent unique and exchangeable digital assets. It is a single piece of digital content, such as an image, video, or piece of music, that has been "tokenized" by creating a unique, non-tradable token on a blockchain. This allows you to be the sole possessor and controller of the original digital asset, and allows your NFT to be bought and sold as a unique and valuable piece. You can access Binance NFT to discover all the projects.

Mining-based: These are cryptocurrencies that are obtained through the mining process and use proof of work ( PoW ) to generate new coins by completing blocks of verified transactions that are added to the blockchain. Some examples of these altcoins are BNB, Litecoin(LTC) and Monero(XMR).