What does cryptocurrency mean and what is its function?
Digital assets that are used as virtual currencies and do not exist in physical form are called cryptocurrencies. Cryptocurrencies; they are protected by cryptography. Thus, for example; the act of “double payment”, which means forging or making multiple transactions in the same cryptocurrency, is almost impossible.
The world’s first cryptocurrency was Bitcoin, created in 2008. Bitcoin is followed by other types of cryptocurrencies, which today number in the hundreds. Unlike currencies in the classical sense, cryptocurrencies are not issued by central authorities. This feature is probably the most attractive aspect of cryptocurrencies for investors. As such, the vast majority of cryptocurrencies remain exempt from government regulation and manipulation.
What determines if the investment vehicle is a cryptocurrency?
The concept of cryptocurrency has actually been in our lives for years. For example, all transactions made over debit cards, virtual cards, or the Internet used cryptocurrencies instead of physical banknotes. The transaction was done on a digital basis, without physical remittances between banks. Therefore, from a point of view, cryptocurrencies were also used in these transactions. As a result of these transactions, there were only numerical changes in the financial system. New generation cryptocurrencies, on the other hand, are used primarily in digital transactions and are distinguished from their ancestors by the fact that they do not physically exist. It also differs from previous versions in that, as mentioned above, it does not follow state or organizational rules and trades at the consensus of all units in the system. The main reason it has attracted so much attention and love compared to other currencies in the world is that it has a decentralized structure. As a result, transactions are not under the control of a single authority, but through the control and approval of all users. This feature makes this currency more secure.
How is a cryptocurrency created?
Cryptocurrencies are created through a process called mining. Individuals with special hardware (hardware) will be rewarded by a network with cryptocurrencies such as tokens or Bitcoin in return for the service. In this decentralized competitive process, if too many people try to mine coins, it will become increasingly difficult to profit from each new addition to the network. This is one of the main reasons why the value of Bitcoin, which can be produced in limited quantities, has increased over time as it has become more popular.
What is Bitcoin? What makes it valuable?
As mentioned in the two previous articles on this subject, Bitcoin was the first cryptocurrency to meet the above definition. The feature that distinguishes it from other cryptocurrencies and allows Bitcoin to be accepted as a form of “money” today is that it can be used in place of physical money in the market. Today, the number is still small, but alternatives to large service sector companies such as 9flats.com, Airbnb’s competitors in Europe, or airBaltic, which is not one of the well-known airlines, are embracing Bitcoin. Their deal for a long time. In fact, the value of Bitcoin is expected to increase in the future, so people who shop at these companies can say, “If not today, in the future,” I had the most expensive vacation. ” I can do it, “jokes.
The use of Bitcoin and subsequent cryptocurrencies gives users the most popular feature in the financial world: trust. This confidence has made it more likely to be accepted by banks, traders, institutions and individuals for the long term and to be used in all areas without distinguishing between transactions. Therefore, the faster and wider the cryptocurrencies become valid payment methods, the more valuable they are perceived.