What are digital currencies?

The digital currencies They are a medium of exchange available electronically, that is, digital money, so they do not exist physically like coins or bills. Just like cash, you can get it, transfer it, or exchange it into another currency. 

Society is immersed in an evolutionary process towards digitization, it is increasingly common to make purchases or transactions electronically. All areas are evolving towards it, such as banking, shops or education. These types of coins allow instant payments to be made without barriers or borders, and thus avoid possible additional charges as occurs with transactions. 

Currently, most of the world's money is virtual money, with cash being only 8%, a trend that has increased over the years, as there are more people who make their purchases or transactions digitally.

What is a cryptocurrency?

Cryptocurrencies are made up of different types of digital currencies, they are about digital assets used as a medium of exchange. They use a cryptographic encryption to ensure their security and trust, which prevents them from being hacked or copied. Some of the most widely used cryptocurrencies today are Bitcoin, Ethereum, and Litecoin.

The cryptocurrencies  They do not require intermediaries in the transactions and, furthermore, they are not regulated by conventional financial systems, unlike the money found in banking entities. Control of those transactions resides in the blockchain, a decentralized database. This technology works like a shared accounting record, that is, it is protected and shared on the network, so that your data cannot be altered or deleted.

The value of cryptocurrencies changes based on supply and demand, as well as the commitment of its customers. 

What kind of digital currencies exist?

Currently there are many types of digital currency, although only some have managed to gain a foothold in the market and maintain significant liquidity due to their greater use and popularity.

Bitcoin

 In 2009, talk began about a new decentralized transaction system, called Bitcoin, referring to it as digital currencies. It was the first to appear, becoming the most famous and widespread currency in the digital world. Satoshi Nakamoto was or were the creators of bitcoin using the technology that they themselves invented, the blockchain.

The value of bitcoin has increased considerably since its inception, when it did not reach the dollar, to the present, which exceeds 6,000 dollars. There is no regulation for it, like the rest of cryptocurrencies.

To get bitcoins you need to buy or exchange the currency itself in specialized portals, and for this it is necessary to have enough knowledge to be able to operate without risks. 

Is digital currency has managed to pave the way for a new way of understanding money, making it possible to organize trips, buy products and hire services through this new form of payment.

ethereum

Considered the great alternative to bitcoin, it was first launched in 2015 and since then it has managed to gain popularity very quickly, becoming the second virtual currency most used. Despite the continued rise of bitcoin, this digital currency that was born to complement bitcoin also fueled the rise of new rivals and has managed to gain a foothold in this digital world and in the minds of investors.

ethereum refers to the digital platform, while the currency itself is called Ethers. That is, Ethers are the cryptocurrency of the Ethereum network. Vitalik Buterin, at just 20 years old, created Ethereum so that smart contracts could be created and executed more easily, writing a couple of lines of code and with high transaction speed.

Unlike bitcoin, it was not created to be a digital currency global, so they do not act as competitors. Actually, its use goes beyond sending money, since the Ethereum network allows you to create cryptocurrencies and anything else programmable.

Litecoin 

Litecoin it was designed to be used in lower value transactions and given greater use in everyday life. It was created in 2011 by a former Google employee. Its operation is very similar to that of cryptocurrencies such as bitcoin, it shares many characteristics and is based on its original code, although it has a simpler process that is managed in more basic computer systems. 

It works through an open source and cryptographic protocol involved in both the creation and transfer of coins. 

Like bitcoin, litecoin is a digital currency. Comparing both, bitcoin is used more in the cryptocurrency market as a long-term store of value. On the other hand, the litecoin unit limit is higher and its litecoin mining process is much faster too. 

All this has made it an alternative for people who have less experience in the field of cryptocurrencies.

Binance Coin (BNB)

BNB It was launched in 2017 by the Binance platform, a centralized exchange that allows the purchase, sale and exchange of cryptocurrencies characterized by very low transaction fees and a wide variety of tokens and cryptocurrencies.

The own cryptocurrency known as BNB is born from the ERC-20 type token, which allows storing and maintaining value. It was built within the Ethereum blockchain, which was later transferred to the Binance Chain platform's own blockchain.

Is cryptocurrency It is created in order to be able to pay for transactions within the platform exchange. Some of the most common uses of BNB are travel expenses, loans, payments for goods, creation of smart contracts, and other transactions. 

One of the main characteristics of Binance Coin is its total market capitalization with a solid structure and its large trading volume.

If you liked this article and you are interested in continuing to learn about more topics, in this other post we talk about the free prepaid card without bank account.