In order to get into the cryptocurrency market, there are a few things you will need to know first. As with most things, it is best to get a bit of background information on whatever you are researching. This is why we will start off by explaining what exactly cryptocurrencies are.
What cryptocurrencies are
At the most basic level, cryptocurrencies are exclusively digital currencies. Such a system could only come about in the modern day, through the online world. They use complex mathematical algorithms to make sure that they encrypt every single transfer. They then store all transfers on a blockchain. Since the entire world is connected online now, there is no longer a need to rely on traditional institutions for monetary exchanges. In fact, cryptocurrencies do not tend to have any connection with national governments at all.
The usefulness of crypto
This is incredibly attractive for many people worldwide who may find their own currencies all that reliable. Countries like Venezuela have had huge runaway inflation because of government meddling in their economy. This means that the currency they have access to is practically worthless. Cryptocurrencies offer an alternative, where people can pay with currencies that other people across the world recognise. Essentially then, cryptocurrencies can be safe-havens that people can use in times of economic struggle. This applies for worldwide as well as localised problems.
Another use may be in evading government surveillance. Due to how easy it is to keep an eye on payments with electronic means, governments can keep a close eye on their people. Any cryptocurrencies offer total anonymity to their clients. This means their clients can pay for products in total peace, without worrying about the government.
There are just a few of the use cases for cryptocurrencies and what they are. Next time, we will further explore how cryptocurrencies work.