Which Cryptocurrency Should You Invest In?
A lot of people are talking about digital currency these days. The main reason behind this is because of the fact that digital money works under the radar at all times. All transactions made via Cryptocurrency are processed completely transparent and anonymous. People feel free to make any kind of transaction they want without the fear of getting caught. Transactions done under Cryptocurrency are considered safe because unlike conventional money, nothing will be traceable. However, it is still best to be well informed before you dive into the world of Cryptocurrency trading.
Before you dive into the world of Cryptocurrency you should know what it is first. In general, a Cryptocurrency is an alternative form of money which is stored as a database and not unlike how banks keep gold bullion. A Cryptocurrency usually comes in the form of coins or paper certificates. A lot of central banks have taken a good look into Cryptocurrency and have started issuing their own forms of coins for their customers, although these aren’t generally recognized as legal tender.
If we’re going to get technical, a Cryptocurrency is a system that uses a distributed consensus algorithm instead of a Proof-of-Stake system. Proof-of-stake involves a finite amount of computing power from a group of computer experts who agree on the state of the network. Distributed consensus occurs when a majority of the computing power is owned by a number of users instead of just one. The main difference between the two is that Proof-of-Stake requires more sophisticated mathematical algorithms while a distributed consensus relies only on users’ computing power to decide the value of Cryptocurrency.
There are a lot of different kinds of Cryptocurrency out there, but the two most popular ones are Monero and Dash. Dash is currently the most well known of the two and it was created by a person or group calling themselves the Dash Foundation. What makes Dash so special is that it’s based on the” Anon Protocol” which is an open source project for the internet. Basically, Anon is a way for individuals to communicate without having to reveal their private key. This is similar to how Tor Networking works, except with Anon you don’t need to give out your private key in order to chat.
Another kind of Cryptocurrency that’s starting to become popular is Augur, which is a type of futures market where a commodity (the token in this case is the coin) will be purchased from three different sets of independent observers. Once the purchase has been made, then it’s the opinion of these three witnesses that the price of the coin has gone up or down. Basically, these types of Cryptocurrencies are more similar to futures contracts than they are to stocks or other assets. This is why many people see them as a great way to make money if you’re interested in trading commodities but you don’t have your own money to do it with.
One final Cryptocurrency that is on the rise in popularity is the tokens that are issued by “central banks”. Usually, central banks issue currencies in their countries and then allow their citizens to buy them from the central bank for use as they see fit. A nice feature of Cryptocurrency issued by a central bank is that they can issue tokens without having to resort to the problematic process of creating a new supply of money. This means that instead of going through a lengthy and expensive process of creating a new currency, the central bank issues tokens automatically as they have them. The major benefit of this is that if something happens in the future when a central bank no longer exists, then the tokens can be converted back into cash.