Cryptocurrency, or more commonly know as “crypto”, is a digital currency. Crypto is a private and secure way of moving money online, and is also used as store of value in portfolios.
Crypto started as a way to buy goods and services online between a small group of enthusiast, but has now become a very common form of payment.
Crypto uses Blockchain, which is a type of database that stores information in groups and sections, called blocks, and then chains them all together. When the information from the first block is passed into the second, it’s stored as a chronological series of events, which allows all the users to see the permanently-recorded activity in chronological order.
Bitcoin was the first of the digital currencies created and is the most well-known of the cryptos. It was first mentioned in its white paper in 2008 by an unknown figure or group known has Satoshi Nakamoto. Bitcoin gained fame because it represented an anonymous way to transact money, securely, with no governing bodies.
Bitcoin is also called a Token. Most of cryptos tokens are unregulated and run on decentralized peer-to-peer networks. As of 2021, data from CoinMarketCap.com lists over 10,000 tokens that are publicly traded on exchanges.
An exchange is platform where tokens are bought and sold with fiat or digital currency. Just like fiat currency, the value of digital currency is based on supply and demand. Once a token is acquired, it is stored in either an online or offline digital wallets. Offline wallets are referred to as cold storage wallets and are the most secure of all storage options.
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