How do cryptocurrencies work? A simple, jargon-free explanation of the crypto industry

It may seem impossible to some fans of digital currencies that, at this point in the game, there are people who still do not know what cryptocurrencies are or how they work . And vice versa: perhaps those people who are completely unaware of the cryptographic ecosystem think that it is impossible for there to be so many people investing in them. But… Let everyone do what they want with their money . If you are one of the latter, and even if you never intend to use them, you may be interested in this article in which, in a simple way and without technicalities (or with as few as possible), the most basic notions of the crypto world will be cited . Knowledge does not take place. What are cryptocurrencies? Cryptocurrencies are digital assets that use cryptography to ensure the security of transactions.

Although each one has its particularities

50 concepts related to cryptocurrencies that you should know before investing The value of cryptocurrencies changes constantly (later we will see the reason for these continuous variations), in fact, one of their main characteristics is their extreme volatility. For this reason, they are currently used much more as a form of very high-risk investment than as a means of payment. As a button shows: according to CoinMarketCap , on November Netherlands Mobile Number Database bitcoin reached its highest price in history, 58,283.8 euros. At the time of writing this article it is at . Therefore, the price of BTC has fallen by 64.23% . Common characteristics of all cryptocurrencies (and with the development of the so-called metaverse cryptocurrencies the differences are becoming accentuated), there are a series of characteristics that are common to all and serve to understand very well how cryptocurrencies work. They are the following.

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Hence they have become a form of investment

It is like a large accounting book that stores all the operations carried out by the members of the network. They are cryptographic, that is, they use encryption techniques for transactions. They cannot be counterfeited or duplicated. It is not possible to cancel the operation. They are bought with fiat money and sold for fiat money . . They are not controlled by any institution, administration, or bank. Ergo, they are not regulated and, therefore, not covered by Bahamas phone number list any of the customer protection mechanisms, such as, in Spain, the Fogain ( Investment Guarantee Fund ). Why does the price of cryptocurrencies vary? A key aspect to fully understanding how cryptocurrencies work is to understand why their price is so volatile. On the Santander website they give an accurate explanation: ” The value of cryptocurrencies varies depending on supply.

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