What is cryptocurrency? A beginner's guide to digital currency

Cryptocurrency is a form of digital currency that enables secure payments and money transfers without the need for banks or governments to get involved. In some cases, cryptocurrency can be bought and sold like traditional investments, such as stocks and bonds. 

But most popular forms of cryptocurrency can be mined by computers in exchange for other currencies. Some of the more popular types of cryptocurrency include Bitcoin, Ethereum, Monero, Ripple, Dash and Litecoin. Each type of cryptocurrency has different features, but all offer the same benefits (like lower transaction fees) that make them attractive to investors around the world.

What is Cryptocurrency?

Cryptocurrencies are decentralized and distributed peer-to-peer systems based on blockchain technology, which requires an electronic signature and is supported by a proof-of-work protocol to provide the security and legitimacy of money transactions. It all started with Bitcoin: 

The world’s first cryptocurrency was introduced in 2009 by pseudonymous developer Satoshi Nakamoto. Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution, and have increased sevenfold in value over last year (at time of writing).  

The future of cryptocurrencies: There are now more than 1,000 cryptocurrencies available online, with new ones being created regularly.

Understanding Cryptocurrency

Cryptocurrency was created in 2009 by a pseudonymous developer (or developers) going by Satoshi Nakamoto. While that person’s true identity remains unknown, their invention has taken on a life of its own with a market cap of over $200 billion. At present, it’s safe to say people are paying attention. So what exactly is cryptocurrency and how does it work? Let’s find out. 

Simply put, cryptocurrency is digital money you can use to buy things from anyone who accepts it as payment. That includes physical items like clothing or food as well as online services like web hosting or even airfare. It also includes other cryptocurrencies, which we’ll explore later in more detail. Understanding cryptocurrency starts with understanding money itself, so let’s start there..

How to Buy Cryptocurrency?

If you’re already decided that you want to start your own digital currency and are ready for a step-by-step approach, here’s how to get started: 1. Pick Your Cryptocurrency - There are more than 1,500 cryptocurrencies out there, but Bitcoin is still king of them all (and Ethereum will probably give it a run for its money in 2018). 

The rest of these coins can be categorized into two major groups—the so-called tokens and altcoins. Tokens generally operate on top of another blockchain platform, like Ethereum or NEO, while altcoins are usually built independently from other platforms. 2. Decide How You Want to Store It - Once you’ve picked your coin(s), decide how you want to store them. 

Many people opt for online wallets like Coinbase or MyEtherWallet because they are easy and convenient—but if security is a concern, then go with hardware wallets like Trezor or Ledger Nano S instead. 3.

How Does Mining Work?

When you think of mining, you probably think of digging in a mine or adding transactions to a blockchain. This process is known as proof-of-work mining, which refers to solving complex mathematical problems using computers in order to verify transactions on blockchains. 

In recent years, however, there has been an alternative way of mining that doesn’t require massive amounts of electricity and computing power: Proof-of-stake mining. With proof-of-stake mining, instead of earning rewards for processing transactions, miners earn tokens for holding their own coins. The more coins they hold and stake (or lock up), the more tokens they earn over time.

5 Best Digital Currencies To Invest In 2018

Of all of today’s promising investment opportunities, none is more popular or potentially lucrative than cryptocurrencies. The best of these cryptos (short for cryptographically secured currencies) such as Bitcoin and Ethereum have already made a huge impact on our global economy. 

With that in mind, here are 5 of what we believe are currently best altcoins (altcoins are alternative cryptocurrencies) to invest in. Each of these has distinct features that make them interesting choices. We’ll explain each one in detail below: 1.) NEO (formerly Antshares): This is an open-source platform designed to allow smart contracts and build decentralized applications using blockchain technology. 

It also allows users to register, trade, and circulate multiple types of assets through digital identities on a peer-to-peer network. In short, it could become China’s answer to Ethereum – only better. 2.) Cardano: Designed by two former Ethereum developers, Charles Hoskinson and Jeremy Wood, Cardano aims to create a new way of running decentralized apps and smart contracts known as DApps (decentralized apps). 

Cryptocurrency:

In doing so, it uses Ouroboros, a proof-of-stake algorithm based on cryptography. 3.) Qtum: Another Ethereum killer with roots in China. Qtum combines Bitcoin Core infrastructure with an intercompatible version of Ethereum Virtual Machine (EVM), allowing it to run smart contracts and DApps. 4.) Lisk: Similar to Cardano, Lisk was created by Max Kordek and Oliver Beddows. 

It was launched in May 2016 after raising over 14000 bitcoins during its ICO (initial coin offering). Its goal is to provide simple tools for developers building applications on its sidechain linked blockchain system. Like Cardano, it also runs on Ouroboros, a proof-of-stake consensus protocol. 5.) Waves: One of 2017’s top performers in terms of price appreciation, Waves was developed by Sasha Ivanov in Russia back in 2016. 

Essentially, it offers fiat gateways which means anyone can launch their own tokens easily without having to deal with complex programming languages like Solidity used by Ethereum and others.