What is cryptocurrency?

The number of cryptocurrency holders is growing exponentially. Today, there are more than 13,{{1}} digital currencies in the world that operate through an asymmetric encryption mechanism. In Ukraine, attention to cryptocurrencies has recently increased due to the rapid growth of their prices. Let's take a closer look at what cryptocurrency is and how it works.

What is cryptocurrency in simple terms?

The date of birth of cryptocurrency is considered to be 2008. Back then, an unknown person under the pseudonym Satoshi Nakamoto published a file with the protocol and the principle of the electronic payment system.

Cryptocurrency is a mathematical code that carries certain information. Digital or virtual money can be used to pay for goods and services, as a way to accumulate funds, and as an investment instrument for passive income. Unlike conventional money issued by the NBU, crypto money will exist only on the Internet and cannot be minted or printed in banknotes.

Which cryptocurrency is the most popular in the world

Bitcoin is undoubtedly at the top of the cryptocurrency popularity rating. It works according to a set algorithm, so you can predict the issue. The main advantages of bitcoins based on blockchain technology include:

• no restrictions on payments;

• control over personal funds;

• low entry threshold;

• lack of control by third parties;

• fast transfers;

• equal rights for all cryptocurrency owners;

• minimal fees;

• developed infrastructure.

In addition to Bitcoin, Ethereum, Solana, Cardano, and other types of currencies are in demand on the market.

How does cryptocurrency work and what is it used for?

Cryptocurrencies may seem complicated for beginners, but this is only at first. It operates in a decentralized network, meaning that transactions take place directly between users without the need for a central authority or intermediary. Detailed information about cryptocurrencies is stored in a special distributed ledger, which is created on the basis of blockchain technology. Each new block contains records of all transactions and other information. Mining is the only way to create new blocks of transactions and enter them into the blockchain. You can buy various goods or services with cryptocurrency.

What are the advantages of making payments in cryptocurrency?

The main feature of digital money is the creation of smart contracts in the form of an electronic algorithm for the exchange of assets or money. The anonymity and independence of the currency attracts attention. Other advantages of digital money include:

• high liquidity;

• exchange rate growth in the long-term dynamics;

• is a universal payment instrument;

• high speed of transactions;

• impossibility of counterfeiting;

• decentralization.

Cryptocurrencies have another advantage: they are not affected by inflation. The money is stored in a personal electronic wallet, and you don't need a bank for this. Anyone can create their own wallet online without verification and make any transactions without restrictions.

Where and how to buy cryptocurrency?

Cryptocurrency is a good way to make money for beginners. You can buy digital money in online exchanges or on an exchange. Each option has its pros and cons.

Buying cryptocurrency in exchangers

You send regular money in electronic format through the exchange office and receive digital money. The process is quite fast and convenient. You should choosereliable and trusted exchangers such as NaMomente. The service's advantages include high transaction speed, favorable rates, security, and integration into the largest crypto exchanges. You can quickly buy and exchange one cryptocurrency for another or traditional fiat currencies, including dollars and hryvnias. We will also tell you which type of blockchain to choose when transferring and avoid possible mistakes. So that your money turns into cryptocurrency as quickly as possible and with minimal fees. You can learn more about this here:Cryptocurrency exchange.

Buying on exchanges

The best cryptocurrency exchanges are Binance, Coinbase Exchange, Quickswap, and Bybit. You need to create an account on the exchange, fund your account, choose a cryptocurrency, and place a purchase order. For safe storage, you need to transfer your cryptocurrency to your own wallet.

What are cryptocurrency wallets?

Cryptocurrency is stored in a special application - an electronic wallet. You can have as many e-wallets as you want, and there are no restrictions on the number and size of them. They are divided into the following types:

• Online or hot. They work via the Internet and include desktop (dextophone), mobile (via mobile applications), and web wallets (via a browser). Examples include MetaMask, MEW, Electrum, and others.

• Offline or cold. They can be hardware or paper, such as Ledger Nano S Plus, Trezor Model T, and others.

A wallet can only hold assets in digital currency or allow you to manage them. It has a unique cryptocurrency key. You can take cryptocurrency training from scratch. This will help you understand the peculiarities of digital money.

Cryptocurrencies are the money of the future, which do not require money supply management and operate as a separate system.