September 8, 2017

What is a Cryptocurrency?

Lots of people have heard about cryptocurrencies but few understand what they actually are: they are currency on software platforms. So normally the currency used on software platforms are centralised currency so you would pay for windows using sterling or dollars but cryptocurrencies replace these centralised currencies with a currency based on blockchain technology. You could send payments via paypal or Western Union but with these you are sending your normal currency via an electronic system however traditional currencies have some restrictions e.e. there may be transaction fees, regulations and you may be stopped from making certain payments or payments to certain countries like Nigeria.

Cryptocurrencies are non-regulated so should be free and accessible across the globe. People are naturally quite sceptical and untrusting so it may take a while for these currencies to be accepted or used widely but the best known such as Bitcoin are paving the way for others to follow.

It all sounds great but at some stage a cryptocurrency will fail, maybe a few will so there is a built in risk involved. When they do fail they will totally collapse so it is prudent not to hold too much of your money in these assets some will succeed spectacularly and some will crash totally.

You have the normal risks involved with high risk investments but also the fact that the technology is untested at certain levels and the whole thing is based on that technology so there is added risk involved. Always have your own wallet to keep your currency in and don’t leave it with trading accounts as these have been known to fail or some unscrupulous people have closed them down and everyone have lost the money they kept there.

So what is blockchain?

It is basically a database but traditional databases are held in one place and all transaction go through that one place. With currencies those central databases are normally a bank and that data will be backed up in various places. With blockchain the database is held on thousands or potentially millions of computers and they all have to agree. So if one database is hacked and something changed it won’t agree with all the other databases so will be changed back to match. So in theory it should be extremely safe and almost impossible to hack. So if someone hacks into your personal computer and empties your account all is not lost. Your database will not agree with everyone else’s around the world and so the technology will amend your data base to match everyone else’s and you will be back to where you started.

Each Wallet has a public address and a private address. The personal bit is in reality the password you use to access your funds so don’t ever give it out as anyone with this password can access your funds.

Go to our home page and look at the trading platforms we have chosen for you to choose from and start buying the cryptocurrency of your choice but only if you know the risks. Platforms like Ayrex or IQ option along with any of the others should have functionality that would be perfect for you.

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