Crypto-Currency 101
What is a, “Digital” currency, how does that even make sense?
Digital currency can be defined as an Internet-based form of currency or medium of exchange distinct from physical (such as banknotes and coins) that exhibits properties similar to physical currencies, but allows for instantaneous transactions and border-less transfer-of-ownership. That's Wikipedia by the way, what they mean plain and simple is that digital currency is online money, it can be used to perform borderless transactions by borderless I mean digital currencies do not particularly belong to any government neither is it confined by geographic location or some other constraint that affect fiat currencies and as such is unaffected in the event that the government fails.
What are Altcoins?
Altcoins are any coins that aren’t Bitcoins. As of today, there are over 200 different Cryptocurrencies and I will be introducing them to you one after the other as we further delve into digital currencies.
What is an Altcoin worth?
Different Altcoins have different values. It can get very confusing to see the value variations among the various Altcoins and indeed in comparison to bitcoins. This is as a result of many factors such as demand and supply, consider that there are only 21,000,000 Bitcoins and there are about 100,000,000,000 Dogecoins.
Who even uses these Cryptocurrencies?
A lot of companies have started taking them. Countries, such as Iceland with the Auroracoin and Spain with the SpainCoin have used it as a way to stimulate their economy without having to actually print physical money.
Who determines the price of Crypto-currencies though?
No one — and everyone. It’s capital markets!!!!!
An easier way to look at it is like a stock, a commodity, or another asset. Stock price changes based on supply/demand. Gold price changes, relative to fiat, based on supply/demand. Even the price of rice changes price based on supply/demand.
Where can I spend Cryptocurrencies?
But where can I currently use them? This is a tricky question especially if you are in this part of the world, some airlines now accept bitcoins, and if you are not looking to travel then you can check CoinDesk; they keep an updated list of where you can spend Bitcoins, and so does 99 Bitcoins. It ranges from online stores, real-life casinos, and charities. Also you can exchange your cryptocurrency for money at many of the various currency exchanges around. I will be bringing you a more concise list later
Why should I have Cryptocurrencies?
well to answer this question I would say this digital currency is expanding and reforging the way we transact, it is not affected by a lot of the factors that affect fiat currency making it pretty accessible and stable (unlike currencies like the Nigerian Naira) also there is a privacy twist to it. And did I mention it's incredible and unbelievable ability to grow in value due to all the other factors mentioned, my question to you is need I say more?
How are Cryptocurrencies created?
Cryptocurrencies are created by being mined — having computers solve complex equations.
Bitcoin’s protocol uses CPU mining. Since the Bitcoin network is designed to produce a constant amount of Bitcoins every 10 minutes, the difficulty of solving the mathematical problems has to increase in order to adjust to the network’s. Hash Rate increase. Basically this means that the more miners that join, the harder it gets to actually mine Bitcoins.making mining for normal people unprofitable.
Other scrypt-based Cryptocurrencies like Dogecoin, use GPU mining, this means they use graphic cards to solve the equations. There are currently ASIC scrypt miners, but it’s still currently profitable to mine using graphic cards.
If you are not into mining that is alright, There are other ways of Amassing Altcoins on the internet and I will be showing them to you.
So that its guys, I hope I have been able explain Cryptocurrencies a little better. If you have any questions I will be glad to help you out :).
Until next time guys, keep finding out fun stuff.
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