Cryptocurrency is a digital (virtual) currency that does not have physical expression. The unit of such a currency is “coin”, which means “coin” in English. At the same time, the coin is protected from falsification, since the coin is encrypted information that cannot be copied. The use of cryptography has led to the use of the prefix “crypto” in the name of the cryptocurrency. We can say that cryptocurrency is a digital (virtual) currency that is used by the participants in the turnover in order to make payments on the Internet. At the same time, the peculiarity of the monetary unit is its protection against counterfeiting, since data that is not subject to duplication is encrypted in it.
The main difference between electronic cryptocurrency and ordinary money in electronic form is as follows: In order for ordinary money to appear on the account in electronic form, it must first be physically deposited into the account, for example, through a bank or payment terminal. That is, for a regular currency, the electronic form is one of the forms of physical embodiment. Cryptocurrency is issued directly on the Web and is in no way associated with any ordinary currency or with any state currency system. Thus, we can say that “cryptocurrency is a type of electronic money.
The advantages of cryptocurrency include the following positive points: Availability of cryptocurrency - electronic money at any time. At the same time, it is impossible to freeze an account or withdraw cryptocurrency. At any time, you can verify the accuracy of the operations performed. Open source code. Thanks to this feature, everyone can get virtual coins. Anonymity. Unlike classical electronic money, transactions with which are easily tracked, it will not work to get information about the owner of a cryptocurrency wallet. Only the wallet number and limited data on the amount on the account are available. Reliability. Hacking, faking or performing other similar manipulations with virtual currency will not work - it is reliably protected. In most cases, a commission is charged exclusively on a voluntary basis. Limited cryptocurrency. As a rule, cryptocurrency is issued in a limited volume, which attracts increased attention from investors and excludes inflation risks due to excessive activity of the issuer. Thus, the cryptocurrency is not subject to inflation and is inherently a deflationary currency. Cryptocurrency is an independent monetary unit. Nobody regulates its emission and does not control the movement of funds in the account. This feature attracts many members of the Network. There is no commission for the transfer of funds between countries.
The disadvantages of cryptocurrency include the following negative points: The complexity of controlling transfers. Banks and other bodies of supervision and supervision do not have the ability to control the operations on the issue and movement of cryptocurrency. The risk of a ban. Government agencies cautiously approach cryptocurrency. Many countries have imposed restrictions on its use, and violators may be fined. There is no possibility to withdraw the payment. Volatility. Cryptocurrency is unpredictable, as it depends on current demand, which, in turn, may change as a result of changes in legislation and due to other factors. For this reason, there are fluctuations in the price of virtual money. Risk of loss. The "key" of access to electronic money is a special password. If you lose it, the crypto coins in your wallet become inaccessible. Lack of warranties. Each user is personally responsible for their savings. There are no regulatory mechanisms, so in the event of theft, to prove something and return the money will not work. There is no general organizer of trade, which reduces confidence in cryptocurrency. Cryptocurrency is not provided with anything. Inadequate security of cryptocurrency safety.
Mining is the extraction of digital currency. Anyone who has the necessary computer equipment and special software can engage in cryptocurrency mining on the network (mining). Previously, PC and the Internet were enough to implement such a plan, but today the conditions of earnings have become more complicated. Mining involves the use of computer power to solve various problems of forming new blocks of a cryptocurrency network. Every day, calculations become more complex, which increases the demand for equipment. In the process of mining, the computing power of the equipment, solving algorithms, extracts a coin - a set of encrypted information. Confirmation of the presence of virtual currency in the network is a blockchain, which is a kind of account, and the cryptocurrency itself is a set of encrypted data. This currency is stored in a decentralized manner distributed among users' electronic crypto-wallets. Note that with the increasing complexity of the formation of blocks, the mining of virtual currency also loses relevance. The cost of purchasing equipment and the cost of paying for electricity simply do not pay off. That is why in recent years special companies are in demand, having the necessary capacities at their disposal.
Cryptocurrency can be stored in your cryptocurrency wallets, you can use it - sell it to those who do not have mining capabilities, you can spend on those services that provide for payment in bitcoins. Which outlets accepting bitcoins include online stores selling mining equipment or game portals that provide quick money and quick withdrawals. There are regular shops and online services that accept bitcoins. It should be noted that today the cryptocurrency market is small, unbalanced, largely depending on the speculative mood of the participants.