Progress and the world is steadily moving forward, and digital currencies are now actively gaining popularity. Keep reading to learn more about digital currencies, their types and the best examples of virtual currencies.
What is digital money?
As the name implies, it is money that has no physical embodiment. That is, it is only stored online and cannot be touched or seen in person.
The production of new digital coins is the responsibility of mining or staking — the process of extracting them. Unlike traditional funds, virtual currencies are a more acceptable option for those who value anonymity.
Because such coins are developed on a blockchain, they do not have a central server that controls their production and can track transactions. This means that no one can ever know how much cryptocurrency you have in your account, who you send it to, or what you use it for.
Types of virtual currencies
Cryptocurrencies can be divided into tokens and coins.
Tokens are cryptocurrencies that are issued on an existing blockchain. In the scheme of operation, tokens are similar to traditional stocks. That is, they provide their holders with certain privileges, benefits, and dividends. In addition, they give the opportunity to earn on the price difference after the launch and listing on the exchange.
One type of token is stablecoins, which attract users with a stable exchange rate. The rate of such assets can be pegged to the dollar or physical assets such as gold or oil. Stablecoins are used to lock in profits and minimize the risk of losses.
Coins are cryptocurrencies that are issued on their own blockchain. The most prominent example of a coin is Bitcoin. Coins work as an investment resource in a buy-and-hold or trading strategy. They can also be used as a means of payment for various services and goods.
List of the most popular of electronic currencies:
- Binance Coin
- Tether and others
Where can I buy digital currency?
You can buy cryptocurrencies on decentralized and centralized exchanges, as well as online exchanges or P2P platforms. To buy cryptocurrency, you need a cryptocurrency wallet. It stores the information you need to make transactions. Namely, the public and private keys. This data is the only information that will be displayed in the blockchain.
Are digital currencies the future?
With the active digitalization and digitalization of society, virtual currencies are gaining ground in the economy. They provide the ability to use them wherever you are, as well as the opportunity to invest in promising assets with high returns.
Our outsourcing IT company RVA engaged in the development of applications and services payment systems .