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What are cryptocurrencies and what are they used for?

In recent years the buying and selling of cryptocurrencies has become popular. More and more traders and savers invest their money in them. But, in particular, what are cryptocurrencies and what are they for?


To answer the question what cryptocurrencies are, we must talk about bitcoin, a very named asset. Cryptocurrencies or cryptocurrencies are digital currencies that are exchanged online. Unlike money, they do not have their material representation so they are stored in digital wallets.


Differences with paper money

Cryptocurrencies, what is it and how does it work? These are recurring questions today, given the great importance that the famous digital currency Bitcoin has gained in recent years. Since its diffusion, other options have appeared at different prices.


Without regulation: The most important aspect to highlight when explaining what cryptocurrencies are is that, with any of the more than 8,000 versions that exist, in no case do banks intervene. The commercial transaction is carried out between two people, without the regulation of a financial institution.


It is the biggest difference with traditional money. Generally, the currency of each country is regulated by the national bank from which it is issued. For example, the Argentine peso is regulated by the Central Bank or the euro by the European Central Bank.


No country intervention: As digital currencies do not depend on a country's authorities, neither do national economies affect their value. For the variation of its price, differences between digital supply and demand intervene.


Cryptocurrency market: what are they for?

Fast payments: In the cryptocurrency market anyone can buy the digital money on the platforms that sell them, such as Libertex, and then they can make quick payments to avoid transaction fees.


Buy products online: At the moment not all companies have the possibility of carrying out commercial exchanges with cryptocurrencies open. However, given the growth and demand of recent years more and more companies have added this service. For trading crypto please read about Cryptex Exchange


Investments in CFDs: It is related to the price of cryptocurrencies. People invest their money in the cryptocurrency market to make a profit.


CFDs, contract for difference, are contracts where you trade on the difference in the price of a cryptocurrency between the moment you open a position and the time you close. They are called contracts for difference, because derivative products allow you to invest in different currency markets without acquiring the underlying assets.


Most popular cryptocurrencies

The most well-known, quoted and popular cryptocurrencies are Bitcoin, Litecoin, Ethereum and Ripple, among others. Their prices are constantly changing, so investors should be attentive to the charts to know the right time of the investment.


Bitcoin is the first cryptocurrency launched in 2009. Its value varies, but the second week of September 2021 its price was around 44,371.25 dollars per unit. On the other hand, Litecoin stood near $172.3, Ethereum $3,171 and Ripple or XRP at $1,037.


Details and disadvantages

An important detail to keep in mind, which can be both an advantage and a disadvantage, is that in the absence of a banking intervention there is also no financial backing. This means that in the event of any type of inconvenience there are no refunds or refunds.


The operation cannot be cancelled because the cryptocurrency wallet or blockchain does not enable the data to be erased. Therefore, if a person wants to reverse the transaction he will have to take the opposite action.


Trading cryptocurrencies has the advantage of not paying commission, but at the same time there is a certain degree of unprotection. Likewise, cryptocurrencies are here to stay. Every day more people join and buy them in a world where banknotes are less used while transactions with digital wallets grow.