Cryptocurrencies: What are they? What are they for? And how to understand them without dying trying

Hello world, my name is Francisco, fcoterroba on the Internet and today I bring you a post in which I am going to try to explain what cryptocurrencies are, what they are for, how they work and, in short, try to resolve all the doubts that anyone has when they wants to enter this fantastic world.

Bitcoin, Ethereum, IOTA, Ripple. We could continue mentioning the immensity of cryptocurrencies that exist today but probably all this sounds like Chinese to you.

A cryptocurrency, explained by Wikipedia:

“It is a digital medium of exchange that uses strong cryptography to secure transactions, control the creation of additional units and verify the transfer of assets using distributed ledger technologies.”

Have you stayed the same? Well, in short, a cryptocurrency is nothing more than a digital currency that uses cryptography to secure and verify transactions.

Roughly speaking, we could say that a cryptocurrency is the same as any conventional currency, see the Euro, the Dollar or the Peso.

Its main difference, or at least the most noticeable, is that there is no paper cryptocurrency. Absolutely everything is done digitally.

But, let us start at the beginning. It is undeniable that the boom that this type of money is having now is thanks to Bitcoin. We must start there.

What is bitcoin?

A bitcoin is nothing more than one of the many existing cryptocurrencies (in addition to being a protocol and a P2P network) that was developed in 2009 by an anonymous Internet user who called himself Satoshi Nakamoto.

At that time, the value of the coin was only a handful of cents (now we will get into why its value has varied so much) but, less than a decade later, it cost more than €10,000.

How were bitcoins obtained?

These can be obtained even today, although their profitability is not as high as it was 10 years ago, which it was for almost any user.

Bitcoins and in general, all currencies can be obtained in two ways:

• Buying them on an exchange, making a bank transfer, etc. In short, paying its current value. 💱
• Mining it.

Sorry? Did you say mining it?

That's how it is. A bitcoin can be mined and, what's more, anyone can become a Bitcoin miner using specialized software and hardware. Even on your Intel Pentium. (another thing is that it works out for you 😂)

In bitcoin, unlike the traditional economic system, in which you can print bills at your free will (even if we screw up later and Europe has to rescue us). There is a limited number of coins. 21 million to be exact and new coins are released every 10 minutes.

In short, a miner receives a mathematical problem every ten minutes. Whoever solves this first gets the new coins put into circulation.

I listened the word "Blockchain" What it is?

A blockchain, or chain of blocks, in Spanish, is a data structure in which the information contained is grouped into sets to which metadata related to other blocks of the previous chain is added on a timeline so that, thanks to cryptographic techniques, the information contained in a block can only be repudiated or edited by modifying all subsequent blocks.

Now, without Wikipedia:

In summary, a blockchain is a large virtual ledger that is built by blocks (the mathematical problems we talked about before) that are then joined together, validated and confirm the obtaining of the cryptocurrency.

Okay, that's all very well, but what is it for?

What is the purpose of having €30 in your wallet? What are those shares that the bank gives you when you open your account for? What is the purpose of having a gold mine in the garage?

Well, at the end of the day, it's all speculation. What can I do with €30? Will my bank shares appreciate in value? Do I mine the gold that is next to my Fiat or is it worthless? Well, if this is your situation, tell me and I'll leave it clean for you.😂

Having, investing or speculating on a cryptocurrency is nothing more than playing the Wolf of Wall Street or feeling like a real stockbroker. You can believe more or less, you can have your theory for a currency to be up or down. You can even invest money to lose it or multiply it.

There are 1001 assumptions about cryptocurrencies: There are those who believe that they will be the new ways of having money, there are those who only see it as another way to invest their money, etc.

What you think?

I, personally, believe that as long as there is no digital currency with which there is no speculation, this will only be valid for investing or having your pension fund.

A currency that costs €300 at 12:00 and €900 at 12:30 can never be part of people's daily lives.

Let's take an example: Let's take Doc's time machine🥼 and go to 2120. Bitcoin becomes the official currency of the Kingdom of Catalonia, the new country. 😂

You are a 20-year-old person looking for your first job and you are hired as a waiter. You are going to collect 100BTC per month. Maybe when they hire you, that 100₿ will give you to live alone, eat, party and save about 20₿. Because those ₿100, when they hired you, had a value of about €1000. But, if the ₿ loses value, your salary will be around €600 and you will not be able to do anything you did last month. Because your salary has lost value, but the rest of the things are still worth the same. And therefore, perhaps at the beginning of the month, it is profitable for a butcher company to sell a steak at 3₿ but at the end of the month it is losing money. Are we going to be setting the values of all products on a daily basis?

That is the main problem of not having a stable currency.

The only cryptocurrency in which I see any future (although only for investment, not to establish it as money in a modern social system) is KaratGold Coin (KBC). It is a cryptocurrency affiliated with the website Karatbars which is sustained by, for me, the largest source of money in the world for many years. Gold.

Advertising aside, if you are interested in the topic, I advise you to download the CryptoCoffee application.

CryptoCoffee It is an application created by my friend and colleague Diego Mourinov in which you can control the daily caffeine you drink and stay up to date with the latest news about cryptocurrencies in Spanish.

Without anything else to add, I say goodbye for today, hoping that you found the topic discussed interesting and you can leave me your opinion in the comments! Regards and until next time! 😊

sources:
Wikipedia, Nobbot.com, Xataka, Academy.bit2me.com, Bitcoin, Buybitcoinworldwide.com, Cointelegraph.com, Rankia.com, Karlheinzniebuhr.github.io, Sucrelaw.com