Now a days, the word "Cryptocurrency" is used very frequently. One gets the idea that its some kind of currency but still don't know much about it. This article will tell you in simple words what Cryptocurrency is. Following technical terms will be used throughout the article which one should know before proceeding:
Block chain:
A blockchain is a digitized, decentralized, public ledger in which transactions made in bitcoin or another Cryptocurrency are recorded chronologically and publicly.
Wallet:
A free private database called a coin wallet. This is a password-protected container that stores your earnings and keeps a network-wide ledger of transactions.
Cryptography :
Cryptography is a method of storing and transmitting data in a particular form so that only those for whom it is intended can read and process it.
Peer-to-Peer:
A Peer-to-Peer, or P2P, Service is a decentralized platform whereby two individuals interact directly with each other, without intermediation by a third-party, or without the use of a company of business selling a product or service.
--source: www.investopedia.com/terms/p/peertopeer-p2p-service.asp
ICO:
An unregulated means by which funds are raised for a new cryptocurrency venture. An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks
--source: https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp
What is Crytocurrency?
Cyptocurrency is the new digital form of currency. It has become very popular recently. It is basically a virtual form of currency. There are no hard copies of it or its record. All the transaction records are available on block-chain, an online public ledger, keeping the identities of the people anonymous.
It all started from he first and the most popular Cryptocurrency "Bitcoin" but, now there are many Cryptocurrencies in town but still Bitcoin is still on the the top and now has a price around 14549.91 US Dollar per coin.
Now one might say its similar to bank's credit or debit card. But Credit and Debit cards involve a third party that is the bank, whereas in Cryptocurrency its just you and the vendor. For example, If i were to buy a cup of coffee, the difference if I pay with a credit card or if I were to pay with Crytocurrency would be that the credit card transaction involves third parties as mentioned before (bank) and it would take three or more days for money to transfer to seller's account, however they will be deducted from my account whereas in Cryptocurrency, it takes just maybe 15 minutes for a transaction to be complete between two people(peer-to-peer).
Crptocurrency is mostly used for peer-to-peer transaction. It offers a secure and a fast way for P2P transactions.
Unlike banks it does not involve any third party and can easy be done in a click.
Transfer/exchanging of currency:
For exchange of Cryptocurrency, one person transfer the fund to other person's wallet or it can be transfer to some exchange such as Bittrex. Sending coins to someone's wallet is very easy and secure, there is a lesser chance of being hacked and fee for such transaction is very low.
How to get a Cryptocurrency:
1.Mine:
How to mine:
Following are the things required for mining:
- A free private database called a coin wallet. This is a password-protected container that stores your earnings and keeps a network-wide ledger of transactions.
- A free mining software package, like this one from AMD, typically made up of cgminer and stratum.
- A membership in an online mining pool, which is a community of miners who combine their computers to increase profitability and income stability.
- Membership at an online currency exchange, where you can exchange your virtual coins for conventional cash, and vice versa.
- A reliable full-time internet connection, ideally 2 megabits per second or faster speed.
- A hardware setup location in your basement or other cool and air-conditioned space.
- A desktop or custom-built computer designed for mining. Yes, you may use your current computer to start, but you won't be able to use the computer while the miner is running. A separate dedicated computer is ideal. Tip: Do not use a laptop, gaming console or handheld device to mine. These devices just are not effective enough to generate income.
- An ATI graphics processing unit (GPU) or a specialized processing device called a mining ASIC chip. The cost will be anywhere from $90 used to $3000 new for each GPU or ASIC chip. The GPU or ASIC will be the workhorse of providing the accounting services and mining work.
- A house fan to blow cool air across your mining computer. Mining generates substantial heat, and cooling the hardware is critical for your success.
- Personal curiosity. You absolutely need a strong appetite for reading and constant learning, as there are ongoing technology changes and new techniques for optimizing coin mining results. The most successful coin miners spend hours every week studying the best ways to adjust and improve their coin mining performance.
--source: https://www.lifewire.com/cryptocoin-mining-for-beginners-2483064
2.Buy:
How to buy:
There are several ways to buy a Cryptocurrency:
- Through exchanges such as cex.io, Coinbase.
- Buy directly from a trader
- Buy directly from coin manufacturers through ICO.
Now you might get the idea of what Crytocurrency is and how it works and i think these are enough for a beginner.If you wish to learn more internet will be your biggest assist. And If you like it do share and upvote.