Many people have asked me about the cryptos, some others think this is a scam or a ponzi scheme, others do not even know what this is about. In my country people keep being skeptical related to this topic, I dont blame them, i was the same until i started reading about it.
Here I want to list the principal ideas of what cryptocurrencies are:
IS IT MONEY??
in fact they are electricity converted into codes, with a monetary value, that means this is digital money. People are afraid with this point but if you realize money is already digital, cash is dissapearing, people is starting to use only wire transactions and debit/credit cards. If all the costumers from a bank could go and ask for their money in cash the bank would not be able to do such thing.
TOTALLY DECENTRALIZED
There is no central office from a cryptocurrency, any goverment or third party regulated them, nobody is the owner from a crypto, they are totally descentralized, what this means? there is no central authority, they work with a peer-to-peer network (P2P), a P2P is a network where 2 or more computers share information without using a different server.
ANONYMOUS!
The cryptos are anonymous, users are only identified by their virtual identity, you can see the transactions in the blockchain (more info coming in post #2) but you cannot track who was the person that did such transaction.
WHERE DOES THE VALUE COME FROM?
Cryptocurrencies follow a simple principle, "SUPPLY AND DEMAND". When a crypto is launched, they declare how many coins are gonna be released, for example bitcoin has a supply of 21 million coins, there are never gonna be a bigger amount of what they declared, so short said, the more people are demanding a cryptocurrency the more value it will get. Difference with the normal currencies like USD and EUR, who previously were backed by gold, so depending of the amount of gold that a goverment had they could only print a certaing amount of money, but that ended in the decade of 1970, so know they can print as much money as they want and we can only trust in our goverments, and so on the price of a currency drops considerable.
There is a lot to learn, I tried to make all of this very easy for the people that is starting to dive in this world. This is amazing! More info coming on post 2