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What cryptocurrencies are used for: an overview for dummies

11/19/2018
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  • Cryptocurrency_Predictions
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When the number of cryptocurrencies exceeded two dozen, conversations about their excess amount began. Now in the world, there are more than 2000 coins, and a significant part of them find a place for themselves to use. The description of types of cryptocurrency for dummies will allow understanding of this phenomenon.

Blockchain and digital assets

The basis of all cryptocurrency is blockchain, technology for storing and transmitting information. It seems that in the era of huge databases it is difficult to invent something new, but Satoshi Nakamoto managed to do it. He created a technology that allows you to safely share data.

It is quite difficult to understand how it works, but it can be explained in simple words what cryptocurrency for dummies is. Imagine that five people use the same list of information. That is, each has its own piece of paper, on which are the signatures of the other participants in the process. And after each change of information, there is a new collection of signatures. And no one will accept the list, where there is no necessary authentication.

Of course, on paper, this is not possible due to technical difficulties. However, we live in the Internet era, and it is much easier to get assurances from the rest. That's exactly what the blockchain works. At its core, it is nothing more than an information exchange algorithm in which all users are involved. Moreover, cryptocurrency mining for dummies has become quite a convenient way to generate income. Initially, this did not even require the purchase of special equipment, it was enough to have an ordinary desktop computer.

The era of cryptocurrency development

Initially, Bitcoin was created as a means of payment, which will compete with traditional cash settlement systems. However, as it progressed, it turned out that the blockchain has a much larger range of possibilities. A brief cryptocurrencies overview allows you to identify the main uses. With it you can:

  • attract funds from investors;
  • make payments between individuals and organizations;
  • create new crypto coins;
  • use when issuing loans, credits;
  • create databases.

And now we are not even able to guess what else the blockchain has. It is an excellent tool with tremendous development potential. As soon as the company understood what exactly the invention promises, the price of one coin took off in a few months. And the growth catalyst was the emergence of ethereum, a completely new asset.

Smart contracts of ethereum coins

Vitalik Buterin's inventions showed that cryptocurrencies have a great future. He came up with smart contracts. If, when exchanging bitcoins, an object simply changes its owner, then in the new blockchain more flexible use is possible. For example, the issuance of cash at interest. One amount is offered, and the return is different, with a profit. Moreover, the contract itself indicates the amount of profit after a certain time.

In addition, Vitalik Buterin came up with a software shell for trading and creating new crypto coins. If earlier this technology was available only to professional programmers, now almost everyone has been able to issue tokens. This led to the explosive emergence of new business projects.

In order for a joint stock company to attract investors' funds, it is necessary to spend from £ 20,000 to carry out the preparatory work. A couple of hundred pounds is enough for a businessman to create and place his tokens. Moreover, the blockchain will guarantee the safety of funds. Any of the books cryptocurrency for dummies pdf of which is easy to be found on the Internet will help to study this system in more detail. But do not forget that the new technology is still just developing. And any book quickly loses its relevance.

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