Everybody is talking about cryptocurrency and how they make so much money from it. The non-stop conversation about it makes you want to invest your money too. But you don’t even know what it is and what it does.
To help clear a bit of your confusion, we’ll be explaining – in simple words – what cryptocurrency is and how it works. At the end of this article, we’ll also share with you the best cryptocurrency to invest in, especially for beginners.
What is Cryptocurrency?
Cryptocurrency is a digital, encrypted, and decentralized medium of exchange. In simple words, it is virtual money that people can use to pay for goods and services. As virtual money, it is intangible and can only be used or traded online.
Unlike regular money, it is encrypted and decentralized. Meaning that no central authority – like banks or the government – regulates its use. Transactions in this form of currency don’t require approval from a financial institution to push through.
The system that maintains the record of its transactions, known as Blockchain, is also secured by cryptography. Sensitive information (such as a sender and a receiver’s personal information) is private, and transaction amounts can’t be altered.
You might think that it’s similar to the money you have in your credit card or PayPal account. After all, they’re also used and processed online, right?
Yes, but not quite.
You see, the money in your account is “regular money” that’s still under the control of your bank. Any time of the day, they can either grant or deny you access to that money. They also have the power to lower their value through inflation.
How Does Cryptocurrency Work?
Now you might be wondering, if banks don’t regulate cryptocurrencies, then who does? Who keeps a record of all the transactions and ensures that no one cheats and that everything is always in place?
The miners do. Using blockchain technology.
What is Blockchain?
To understand what miners are, let’s first talk about blockchain.
A blockchain is a system that records and verifies all cryptocurrency transactions. It is a public, unified, digital ledger distributed among computers worldwide. This means that anyone who uses cryptocurrency has access to it – unlike bank ledgers that are confidential.
What are Miners?
Blockchain is maintained and updated by miners. These are people – or rather, high-speed computers, that race to solve mathematical problems to verify pending transactions.
When new transactions occur, all copies of the blockchain update themselves with the exact same information keeping them all accurately identical.
The Best Cryptocurrency to Invest in 2021
Every cryptocurrency has its own blockchain.
Yes, there are multiple cryptocurrencies in the market today. In fact, as of January 2021, there are about 4,000 of them in existence.
To own a unit of cryptocurrency, you have to buy them using fiat money. You’ll also need a “wallet” (an app) to hold your “coins”, trade them, and send them as payments to merchants.
With so many of them to choose from, how do you know which is the best cryptocurrency to invest in? in this part, we’ll share the top 3 cryptocurrencies which we think are ideal for beginners to buy.
Top 3 Cryptocurrencies to Buy
Bitcoin is the first usable cryptocurrency to come into existence. A person who hides in the name Satoshi Nakamoto introduced it in a white paper in 2008. He (and his team) launched it in 2009, and since then has been used as an online currency.
Because Bitcoin is the first of its kind, it is also the most popular one. Its popularity makes it one of the best cryptocurrencies to invest in because it’s well-established. There are also tons of that users can use and store Bitcoins is.
Ethereum is a blockchain system for its own cryptocurrency Ether. CoinMarketCap describes Ethereum as an online platform that allows users to create and run software “resistant to censorship, downtime, and fraud.”
One of them is the SmartContracts. It is a computer program that embeds buyer-seller contract terms into a series of codes that no one can alter or reverse. This method of contract execution has provided has gained popularity among businesses because it provides more security for both the buyer and the seller.
Crytpo.com Coin (CRO)
Crytpo.com Coin is the currency of the blockchain Crypto.com Chain. Its creator, Crypto.com, is a company that provides trading, payment, and other financial services to its users.
CRO owners can trade coins, stake their own CRO coins to validate cryptocurrency transactions, and even pay merchants through Crypto.com App. The company also provides numerous perks for users every time they make transactions within the app.
Imagine getting a cashback of up to 20% when you pay merchants using CRO. You also get up to 10% cashback by purchasing gift cards and making peer-to-peer transfers to other users. And the best part is, just by downloading the Crypto.com App and signing up through this link (Crypto Referral Code: 8caxhew2rw) you (and I) get $25 as a signing up bonus.
Aside from that, Crypto.com also offers reward tokens and high annual interest rates when you trade and stake CRO within their exchange app.
All these are part of the company’s effort to help “accelerate the world’s transition to cryptocurrency.”