A digital currency, cryptocurrency, or cryptococcus is any form of digital money that is created and/or held by a computer program or a group of computer programs. It may be exchanged electronically or by mail or wire (computer internet protocol). A “cryptocurrency” is a currency that is issued under a specific government policy. For example, in the United States the dollars are backed by treasury bonds while the Eurozone’s currency, the Euro, is backed by the European Central Bank. In some other instances, cryptocurrencies may be digital collectibles like musical instruments, stamps, books, etc. Others may be digital paid crypto signals software programs or computer programs.
Cryptocurrency exchanges can take several forms, but usually they are thought of as being an online marketplace where two or more people can enter into a “trading agreement.” The two participants then select a “block” of currency, which is the number of tokens that they wish to trade, at pre-determined exchange rates. When a successful trade takes place, the originating investor must send their transaction to the host computer program that is managing the trade for the other participant. This computer program then calculates the sale price of the chosen collection of real currencies, and the host computer system then adds the sale price of one more of the participating currencies to the total of all of the original currencies.
The basic function of the cryptocoin is to provide a venue through which real-time monetary transactions can take place without a central authority. This makes it different from traditional virtual money systems such as those that are run by banks, brokerages, or electronic transfer networks (such as the Internet). There is no physical object that is held by a central authority that acts as a lever for a trade. Cryptocurrency users trust each other and create an environment where trading transactions between them are conducted with mathematically guaranteed certainty and at extremely fast speed.
There are several different types of Cryptocurrency in use today. Two of the most popular include Peer-to-peer lending and Digital Cash. Peer-to-peer lending occurs when one person loans funds to another person, with both parties having a publicly available account where they can view and accept transactions. Digital Cash is actually a digital transaction platform that is based on cryptographic protocols. Both are used to allow people to create online payment methods that work independent of any particular currency.
Because there are many different Cryptocurrency options in use today, it is not possible to discuss each of them in depth. However, two general types of Cryptocurrencies that most people have heard of are Monero (derived from the word MetaTrex) and Dash. The Dash project was created by an Australian entrepreneur who wanted to create a new open source alternative to the traditional currency that uses the metric system. Others have created a variety of other popular alternatives including Dogecoin, LBC, PPCX, and Ethominium.
As you can see, learning about Cryptocurrency is an easy and exciting endeavor. If you are interested in purchasing or trading in Cryptocurrencies, then you should take the time to read review articles and learn more about the various currencies that are available. Learning more about the differing characteristics and uses of different Cryptocurrencies will help you make the right decision for your investment strategy. In the meantime, enjoy participating in the growing marketplace!