With this article, the Digital Nomad invites you to enter the crypto-world with us and learn more about cryptocurrencies.
Cryptocurrencies are highly complex mathematical codes that are created in databases called "Blockchain", these codes are used as a unit of value that is certified by a virtual community to be used as a means of payment and its value is determined by the offer and demand. In other words, it is a virtual currency.
What is the difference between a cryptocurrency and a physical currency?
Cryptocurrencies are decentralized: That is, they do not depend on an institution or financial authority that regulates their value, therefore, it allows direct P2P transactions (person to person) without intermediaries and the best without having to pay commissions to third parties!
The record book: Blockchain is a database that works as an accounting record of all operations but unlike physical currencies that are carried by private banking records. The blockchain has the following advantages:
They cant be faked
As we already mentioned, cryptocurrencies are created with extremely complex codes created in supercomputers and are not printed. Each currency has its specific code so it is impossible to duplicate it, and if someone tries it, it would need to create a computing power that exceeds more than 500 combined supercomputers, which is not profitable to achieve even by a hair!
They issue a property certification:
When you purchase cryptocurrencies you receive a validation code that certifies that you are the sole owner of those funds (until you spend them or transfer someone else), therefore it is impossible for two people to have the same code for a currency.
Protect your privacy: The information of your transactions is converted into unrepeatable codes and you do not need to give your personal data and transaction details to any financial institution.
Do not allow fraud INSIDE THE REGISTRATION:
Movements and transactions with cryptocurrencies are much more transparent since instead of being kept in a private registry they remain in a public register with an updated copy for all users. How does this prevent a fraud? Let's put it in the following way:
In the centralized systems only one entity keeps track of the movements of a currency, for example, the dollar, and prints certain codes and stamps to the paper or currency even with it a forger can print and spend a dollar in a store and the seller I would hardly detect it. On the other hand, the cryptocurrency registry is practically within the reach of each electronic device and is automatically updated, if someone wants to pay for two different transactions with the same code or with a code that does not belong to them, millions of users would immediately notice.
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