What is Cryptocurrency?

A cryptocurrency, cryptocoins, or cryptocoin is a digital currency designed to function as a medium of payment where in individual coin ownership details are kept in a digital ledger based on a computerized database. As this system is not controlled by any government or central authority, there are no restrictions on changing the value of coins and their supply. There is also no need for a third party to approve of how currencies will be used, unlike conventional money that has to go through a series of approvals before it can be issued. Cryptocurrency is very similar to how regular banks operate where they keep records on transactions that take place.

The major advantage of using Cryptocurrency is that it is managed by the network itself, therefore, there are no delays in transactions, unlike with conventional money where there could be problems with someone gaining access to a certain transaction. In some Cryptocurrency systems, currencies are actually “assetized” in such a way that they can be used as an international payment for goods or services that are performed across different countries. This is just another example of how the power of Cryptocurrency can be harnessed for the benefit of the community.

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There are two main types of Cryptocurrency: tokens or digital certificates and actual currencies. In token Cryptocurrency, the value is represented by virtual assets that have no physical characteristics. They are normally backed by a pre-determined algorithm that cannot be manipulated, which makes them virtually risk-free. On the other hand, actual currencies are backed by real commodities or assets, which makes them relatively safe to deal with since the possibility of their values depreciate or increase greatly depending on the economic conditions in the countries where they are exchanged.