Crypto

What Does Cryptocurrency Mean? What Are its Features? Explanation by an Expert From the WhiteBIT Exchange

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It is difficult to imagine the modern world without digitalization. In a fairly short period of time, humanity has practically turned science fiction books of the last century into reality. The financial sector is also developing along with other areas. But due to pressure and total control from governments, this is happening a lot slower. However, with the invention of bitcoin and other cryptocurrencies, the situation has dramatically changed. We talked to an expert from one of the top European crypto exchanges, WhiteBIT, and asked him a few questions about cryptocurrencies.

What is a cryptocurrency?

It is a digital currency secured by cryptography. Cryptocurrency does not have a central governing body and operates in a network with equal participants. Cryptocurrency payments are encrypted and exist only in digital form, while information about transactions is distributed between network nodes. 

The best way to buy crypto is on a reliable cryptocurrency exchange. When looking for one, pay attention to how safe it is, how long it has been in the game, and how many assets and features it offers. An example of a good cryptocurrency exchange is WhiteBIT. The platform ranks in the Top 2 worldwide in terms of security, has over 2,5M users, offers margin and futures trading as well as more than 400 trading pairs.

Features of cryptocurrencies

Cryptocurrencies have a number of features that distinguish them from traditional (fiat) currencies. Moreover, due to their qualities, bitcoin and other cryptocurrencies do not have the disadvantages of fiat money and solve the problems that ordinary people face when using it.

Cryptocurrencies operate on blockchains – decentralized databases that store a chain of digital blocks containing the needed data. It includes information about transactions, NFT ownership, etc.

Decentralization of blockchains ensures the stability of their work. The absence of central servers and the distribution of information across different nodes of the network makes it impossible for a failure of the central server that can deprive users of access to their digital wallets.

Cryptocurrency is protected by cryptography, which makes it almost impossible to forge or reuse it. Thanks to the encryption system, hacking the blockchain is impossible, which makes the cryptocurrency safer than storing fiat money in bank accounts.

One of the key features of cryptocurrencies is the fact that they are not issued by governments or public financial institutions, which makes them immune to any attempts of government intervention or manipulation.

Another feature is the speed of transactions between users. While international bank transfers take from several hours to even days, cryptocurrency transfers are completed in just a few minutes.

An important advantage of digital currency is its complete anonymity. Banks control all transactions and may provide data to third parties. When it comes to crypto, this option is excluded due to the impossibility of tracking any cryptocurrency.

Uses of cryptocurrency

Crypto assets are becoming more common in modern society day by day. They can already be used as a payment method for many real-life products and services. Some companies accept them, and some are still holding back, but, eventually, it is believed that people would be able to use crypto just like they use fiat currencies.

Another option is investments. Some crypto assets offer a higher price and less volatility, which is why they are attracting so many investors. One should be careful even when it comes to volatile cryptos, but if approached correctly, the profits can be significant.

Donations in crypto are also getting more and more popular mostly because it’s easier, safer, faster, and, of course, anonymous.

The future of cryptocurrency

The advantages of bitcoin and other cryptocurrencies are supported by the fact that some countries are thinking about launching their own digital currencies and will most likely take the best of the idea of blockchain.

Cryptocurrencies are becoming popular not only among businessmen, stock brokers, and traders but also among ordinary people who prefer to turn their savings into cryptocurrency. Also, thanks to crypto, people who couldn’t get bank cards are able to gain access to the market of financial products and services.

The development of cryptocurrency will probably lead to the expansion of its use as a payment method for real purchases. Some countries already allow paying with cryptos, and people can buy bitcoin not only on cryptocurrency exchanges but also from crypto ATMs.

To sum up, the analysis of the crypto assets market gives reason to be sure that the interest of humankind in cryptocurrencies will increase, and the positions of digital assets in the global economy will only grow stronger.

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