What are cryptocurrencies?

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What are cryptocurrencies?

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In an easy to understand way it can be said that cryptocurrencies are digital money, it is a payment method that unlike the "conventional" is not governed by a single bank, company, government. etc. It is money that works in a decentralized way, circulates through computers distributed around the world and its valuation is maintained thanks to the estimation of something, that is, it works as an alternative for the currencies that we commonly know, this because unlike these, cryptocurrencies have many agreements between multiple organizations and therefore ends up valuing their estimate more than normal currencies

To maintain good secure transactions uses cryptographic, which keep the money safe when exchanging it with other people, in this world everything is very accurate, if you get to place a data in a wrong way you can make a transfer to a wrong person, so you have to be too careful

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How do they really work?

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As previously mentioned, cryptocurrencies are made under computers distributed around the world, then, there are people who are responsible for somehow extracting them, this through a process called "mining" that is basically decoding through these computers multiple codes which at some point give them to find some or formalize some from scratch by codes, since unlike normal money, this is not printed, this is done digitally

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As for the exchange houses

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That they are valued by multiple agreements, is not the only change that cryptocurrencies have with physical currencies, but also being a decentralized payment method makes transfers directly to the receiver without the need for a regulatory entity such as a bank, it is money that passes from one wallet to the other, however, there are wallets that give the option to buy cryptocurrencies from other people or sell them, they are called blockchains, in which not only can you do that, but you can also do other types of processes such as "stacking", which I will not talk about now because I do not have much information yet.

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Each transaction and movement within the blockchains are called blocks, these blocks are encoded in such a way that each process is approved by a certain cluster of computers, responsible for verifying that each process is legitimate and are the ones that carry out the transfers or movements, it can be said that it is the safest payment method that exists so far, with this I am not talking about investments, but in terms of transfers, investments are a separate issue, in which you can lose or gain too much

Thank you very much for reading