The financial frenzy caused by digital currencies like bitcoin may have an impact on the end of fiat money. In this post, we will take a quick look into the world of cryptocurrency and how it operates.
Is Cryptocurrency Like Bitcoin?
The simplest answer to this question is yes. The first and biggest cryptocurrency was Bitcoin. However, other inferior cryptocurrencies have also come onto the scene during the ten years since bitcoin was created.
All cryptocurrencies have a similar way of operating, which is the use of blockchain technology. They create or track any new form of the digital token using a shared public transaction record. This record can only be created and distributed according to the agreed network rules. However, a large amount of variations has been provided by a flourishing ecosystem.
Other cryptocurrencies such as Dogecoin and Ethereum perform the same function as Bitcoin, which is creating new digital cash or currency. They simply make a few adjustments to details such as making sure that there are a basic inflation level and faster transactions.
Others like Bat and Litecoin apply a similar principle to a unique purpose such as digital advertising or cloud computing. In some cases, they do both.
Bitcoin is not a concrete digital or physical object. Visit https://nakitcoins.com/ to learn more.
In reality, owning a bitcoin simply means that you have a unanimous agreement created between you and a legitimate miner. This unanimous agreement is made up of every computer on the bitcoin network. Hence, qualifying the bitcoin to be accepted for legitimate transactions. There are two things that you may choose to do if you want to own a bitcoin.
The first is to become a miner. This option requires a huge cash investment in electricity bills and computers. It is possible that you may make less bitcoin than equivalent to the cash you have invested in mining. The second involves using fiat currencies to purchase bitcoin or other cryptocurrencies from someone on a reliable peer-to-peer connection platform.
Before a bitcoin or any other cryptocurrency is created, the record of its mining is documented on a block and shared across all the registered computers on the network. After the creation of the first bitcoin in 2009, there has been a gradual decrease in the total number of bitcoins in existence. This reduction is to ensure that no more than the 21 millionth bitcoin will remain by the year 2140. No additional bitcoins will be created afterward.
What You Can Do with Any Cryptocurrency
On paper, any cryptocurrency-based platform can be used for anything that you can do with fiat cash in the real world. In fact, cryptocurrencies have a wider scope than most fiat currencies as they are accepted all around the world. You have to convert a network of computers around the world to a platform with decentralized data processing and storage in other to build a cryptocurrency.
In conclusion, you can use cryptocurrencies like Bitcoin to purchase anything around the world. The fun part is that you can even exchange then for the fiat currency of your choice.