How safe and how profitable is an investment in cryptocurrencies? We analyze what cryptocurrency is and how it can bring you money.

Cryptocurrencies have been in our lives for at least 12 years, and recently it became known that Facebook will also get into the dance, launching its own, called ‘Libra’ and later renamed to Diem‘.

But why are cryptocurrencies so popular? Why does every news outlet publish Cryptocurrency press releases nowadays? How can you buy them? Is it worthwhile to enter the market or the exchange of cryptocurrencies? We will provide answers to all these questions.

Cryptogonia

We begin by blasphemously, paraphrasing the meaning of Theogony, to give the definition of cryptocurrency: it is a word first recorded in 1998 by Wei Dai in the mailing list of the cypherpunks’ Internet collective, supporting the idea of a new form of money based on a distributed database (Blockchain), on an open source software,  which users have the option to modify (forking).

This new kind of money is not based on a central principle, but obeys the norms of Peer-to-Peer trading. 10 years later, Satoshi Nakamoto will publish in the same mailing list the first specifications of bitcoin in the now famous white paper that was later filed in public.

How Do I Start

Need:

• An Internet connection and a computer.
• A bank account linked to your cryptocurrency account.
• A storage space for your coins (digital wallet).
• An account in Coindesk in order to gain full knowledge of the cryptocurrency stock exchange and start your first transactions with them.

It is an intangible currency, whose value is linked to the common confidence among investors, its integration into the financial markets and the public interest in its use. Each cryptocurrency presents its own peculiarities in terms of digital analysis. Each transaction, however, happens as follows:

When the consumer makes any purchase online, banks validate the transaction. In the case of Bitcoin, however, transactions occur without any third-party mediation, through a system called hashing.

When a person pays another person with bitcoin, the Blockchain computers of each cryptocurrency check the validity of the transaction based on the resolution of a related mathematical problem. If the result of the problem is valid, then the transaction proceeds normally and is recorded in the cryptocurrency database.

All transactions of each cryptocurrency are available and transparent to anyone who wishes to keep a record, while it is worth noting that there is no element of refundability and / or cancellation of transactions.

Any transfer to and from a Bitcoin user is considered completely safe and it is extremely difficult to have losses or thefts.

Epilogue

Cryptocurrencies often paralleled the digital revolution of the emergence of the Internet in the late 90s. Those who rushed to invest in shares in digital technology companies at the time faced heavy losses.

The cryptocurrency, of course, is a slightly different revolution: it is a currency that practically abolishes the concept of a bank.

As revolutionary as it may sound (and it is), it is wiser to wait a few more years to see how much it will stabilize worthily and how reliable the map of crypto-currencies is in terms of our daily lives.