Cryptocurrency isn’t for everyone

Cryptocurrencies ( cryptocurrency in English), the most famous of which is Bitcoin, are the first type of currency in history to be completely released by a central bank or by the financial institutions of a state, and therefore in all respects an alternative. to traditional currencies, and more. In this article, we discussed that Cryptocurrency is not for everyone.

They constitute not only the currency of exchange but at the same time represent an online payment method built based on an undoubtedly revolutionary mechanism. The cryptocurrency markets are therefore decentralized compared to traditional ones. This means that there is no central body that issues them, protects them, and controls their dissemination. Find out more about cryptocurrencies in this article.

What are cryptocurrencies and how are they managed.

Cryptocurrencies are managed directly by the individuals who hold them, thanks to the achievements of digital cryptography systems, the last of which is represented by blockchain technology. Not just a simple virtual currency, therefore, but a real system that:

it is not related to the economic and financial performance of a particular country in the world;

it is not linked to interest rates or national and international monetary policies;

guarantees the value of the cryptocurrency thanks to its immutable cryptographic units, or their specific code.

Beware though: a cryptocurrency is not a digital currency. The latter has the same characteristics as traditional currencies, as these are therefore issued by a central authority and exist only in the digital market. 

Bitcoin ;

Ethereum;

Ripple;

Bitcoin cash;

bitcoin gold;

EOS;

Stellar (XLM)

Litecoin;

NEO.

Bitcoin is also the first cryptocurrency ever created, whose domain was registered online in 2008 and the first transaction ever took place in 2009. Only a few years after the total capitalization of cryptocurrencies, during what appeared as a real bubble, has reached around 800 billion dollars. Compared to the latter, the two currencies Ethereum and Ripple represent a further step forward in technology and their functioning.

The first is the name of the system connected to a currency called Ether, a network within which you can even create smart contracts that are considered digital money in all respects. Ripple, on the other hand, is not just a cryptocurrency, but an open-source internet protocol that functions as a payments network, within which to carry out transactions using a currency of the same name.

Cryptocurrencies: blockchain technology

The security of cryptocurrencies is guaranteed by a protection system called blockchain (literally a chain of blocks): a digital and shared register of encoded data that contains information in chronological order relating to each single existing cryptocurrency unit, as well as the transfers that it has. immediately from one user's wallet to another's. 

The protocol that encodes the data of cryptocurrencies is practically inviolable, and this in itself guarantees their correctness and validity. Every single unit is, therefore, nothing more than a numerical series concatenated according to a specific source code and organized in the form of a chain of blocks of bits.

Any attempt to alter the data of each individual cryptocurrency unit automatically blocks the links between the blocks in the chain, thus allowing the intruder to be identified, as it were, and reported as fraudulent by the servers on the network. The process and set of complex calculations that allow you to create a blockchain, by checking the transactions carried out and adding new blocks, is called mining and, in technical jargon, it is said that the blocks are mined. Let's see how.

Mining cryptocurrencies

Through really complex calculations, miners are therefore able to create new blocks of the data chain, selecting the last transactions made, called to be reviewed, to verify the actual availability of funds to complete them.

Already present within the blockchain. Once the check is done, the miners proceed to a second check, to verify that the sender of the transaction has actually transferred the necessary funds through their private key.

However, a cryptocurrency has a maximum limit of 'mineable' (or mintable) pieces. Bitcoin, for example, can reach a maximum of 21 million pieces. As the maximum limit approaches, mining new pieces will become more and more complex and more expensive in terms of hardware resources, because the more complex the calculations that the system must carry out to complete the new blockchain becomes.

Cryptocurrencies: ambiguity and possibility

The world of cryptocurrencies is certainly exciting and revolutionary, especially for the possibilities that this new virtual money can offer in terms of investments, trading, online purchases. At the same time, however, having been born without any type of control, cryptocurrencies are often invested even for obscure purposes in the black and illegal market on the Deep Web, such as the trading of weapons or even worse, as they guarantee that the transaction takes place. in a completely anonymous form.

In fact, the sender and recipient have no name and surname, but everything that appears on the outside is just a series of numbers.

For them to be truly considered a valid alternative in international markets alongside traditional currencies, they will certainly have to abandon their decentralization and accept regulations and controls on their use. Therefore, to optimize and perhaps even limit or reduce some of their functions, to prevent them from being used for illegal purposes. Their popularity sparked a huge debate, which is still ongoing.