Cryptocurrencies are decentralized digital currencies that are based on blockchain technology and use cryptography to ensure the safety of transactions. Cryptocurrencies are not backed by any government or financial institution and are issued and controlled by a decentralized network of users instead of a central entity.
One of the best known cryptocurrencies is Bitcoin, which was created in 2009. Since then, many other cryptocurrencies, such as Ethereum, Litecoin and Ripple. Cryptocurrencies are used to perform online financial transactions and can be purchased and sold on exchange platforms.
Types of cryptocurrencies
Cryptocurrencies are very volatile and have the potential to generate great profits or losses, so it is important to have a solid understanding of the risks before investing in them. In addition, because cryptocurrencies are not regulated in the same way as other currencies, they can be more difficult
There are many different types of cryptocurrencies available today, these are some of the most important and known.
Bitcoin
This is the best known cryptocurrency and is used as a form of online payment and as an investment. Bitcoin was created in 2009 and is decentralized, which means that it is not supported by any government or financial institution and is controlled by a network of users instead of a central entity.
Ethereum
When talking about Ethereum we talk about a decentralized platform for the creation of decentralized contracts and applications (DAPPS). It also includes its own digital currency, known as Ether. Ethereum allows developers to create and execute intelligent contracts, which are programs that are executed autonomously and according to a set of predefined rules.
Litecoin
Litecoin is a cryptocurrency that is based on Bitcoin's blockchain technology but uses a different encryption algorithm to process transactions. This has been described as a faster and more light version of Bitcoin and has been used as an online payment form and as an investment.
Tether
This is a cryptocurrency that is usually called “stablecoin” because its value is linked to that of a fiduciary currency, such as the US dollar. Tether is often used as a way of protecting against the volatility of other cryptocurrencies and as a way to facilitate transactions on exchange platforms.
Cardano
When we talk about Cardano we refer to a cryptocurrency platform and intelligent contracts that use advanced blockchain technology and is decentralized. Cardano focuses on providing greater security and transparency to transactions and allowing the creation of more complex intelligent contracts.
Monero
Another important cryptocurrency is Monero is a cryptocurrency that focuses on the privacy and anonymity of transactions. Monero uses technologies such as “ring signatures” and “Stealth Addresses” to hide the identity of the participants in transactions and make them more difficult to track.