Cryptocurrencies also known as virtual currencies, act as a form of payment for goods and services on the Internet. In addition, they have become a prominent investment niche for many people around the world. But what types of cryptocurrencies are there, in addition to the already famous Bitcoin? What are its main uses and features? And most important: do they involve any risk or danger? These and other questions about it are answered in the following post.
Why are Cryptocurrencies or Digital Currencies Essential?
A cryptocurrency is a virtual currency, a digital medium of exchange that is transforming considerably the way in which goods and services are acquired and paid for. In addition, its value has been increasing with the passage of time, which is why many people decide to invest in them.
Since its birth in 2009, the use of cryptocurrencies is increasingly widespread. But how are these coins different from traditional money? Or expressed in other words, what characteristics define a virtual currency?
First, the main distinguishing feature of cryptocurrencies is that they do not require intermediaries. This means that transactions are made from person to person, leaving other actors such as bank branches out of the game. The fact of eliminating any type of intermediary entails certain advantages. The clearest is the speed since the process is faster and more direct. And, in addition, it also means cost savings.
The Internet makes globalization and interconnectivity possible. In this sense, Digital Coins have a very interesting advantage. They are accepted internationally. The fact of being able to pay with virtual currencies in any part of the world is very beneficial for the people and companies accustomed to carrying out international transactions.
Finally, what differentiates cryptocurrencies from traditional money is that they do not require disclosure of the identity of those involved in the business or transaction. In this way, it helps to preserve the identity of those who use them, providing them with security.
The increasing success of cryptocurrencies as a means of payment and source of investment has led to the emergence of several types of digital currencies. These are some of the most popular:
Top 4 Digital Currencies in the World
Bitcoin is the most famous and widespread currency of the digital world. In fact, it was the first cryptocurrency that appeared.
The value of the Bitcoin oscillates continuously and has increased considerably since its birth. And, while at the beginning did not reach the dollar, the current value of the Bitcoin exceeds $ 53,718, according to experts.
If there are people who buy products, organize trips with the help of technology and contract services through cryptocurrencies it is thanks to the fact that this coin has opened the way to a new way of understanding money.
Many consider it a great Bitcoin alternative. Actually, the currency is called ether and Ethereum refers to the system that controls it. The highlight of this cryptocurrency is its high transaction speed and also that it has introduced the concept of intelligent contracts in the virtual world. This method allows users or companies to sign contracts without commissions or control by any country.
The operation of the Litecoin is very similar to that of other cryptocurrencies such as Bitcoin. However, the process is simpler and can be managed in more basic computer systems. This has made literary an alternative for people with less experience in the field of cryptocurrencies.
There is a conception that cryptocurrencies are the main enemies of banks. However, currencies such as ripple allow banks to avoid border controls and commissions. In fact, the aim of ripple, according to its creators, is to act as a decentralized mutual bank governed by trust.