Today wa are going to talk about the principles and characteristics of cryptocurrency.
Definition of cryptocurrency
Cryptocurrency refers to virtual currency exchanged on the Internet. It is equivalent to real currency and has official status, but has no physical form.
It exists only in the form of data, used as a medium of exchange or store of value. But the functions the same as normal currency.
Cryptocurrency is also known as the native currency of the blockchain.
In many cases, cryptocurrencies is not only a tool to pay transaction fees on the network, but also to incentivize users to keep the cryptocurrency network safe.
Principles and Characteristics of Cryptocurrencies
In 2011, Forbes magazine used the term “cryptocurrency” itself for the first time. Since then, the term has come into use. It can refer to money that has no expression in paper money or coins, i.e. the kind that exists only in digital space.
Characteristics of Cryptocurrency:
It means at least not relying on a central issuer, but using code to manage issuance and transactions. When two people trade, there is no need to go through a third-party authority to ensure the safety and effectiveness of the transaction.
It allows participants to enforce system rules in an automated, trustless manner. It uses cryptography to protect the underlying structure and network systems of cryptocurrencies.
It has incredible earning potential and is gradually gaining popularity because of its huge volatility. Traders don’t even need leverage and any significant personal investment to get high returns.
The value of cryptocurrencies is mainly determined by supply and demand. The actual economic and political situation can hardly affected them. Basically, there are two options for trading cryptocurrencies: specialized cryptocurrency exchanges or brokerage firms (forex).