BITCOIN AND VIRTUAL CURRENCY: HOW TO INVEST IN CRYPTOCURRENCY?

Cryptocurrencies are both a cryptographic currency and a peer-to-peer payment system. These digital currencies are therefore virtual currencies in the sense that they are characterized by a lack of physical support: no coins, no notes, and payments by cheque or bank card are not possible either.

These are alternative currencies that have no legal course in any country in the world. Their value is not indexed to the price of gold or conventional currencies, nor is they regulated by a central body or financial institutions. There are no central banks at their head. And yet, security and transparency are their main assets! Cryptography secures transactions that are all verified and recorded in a public domain, ensuring both confidentiality and authenticity thanks to Blockchain technology.

Blockchain: cryptocurrency’s basic technology

Cryptocurrencies are all based on the same principle: the Blockchain. Cryptocurrencies are a series of numbers stored on a computer in the form of strings of blocks. The principle is actually quite simple and particularly well explained in the article in The Echoes Bitcoin and cryptocurrencies, new digital coins: “Take a database. Allow anyone to make changes in this database, only on the condition that they declare themselves a “member.” Put in place a very long and complex control procedure that must be carried out each time a certain number (“block”) of changes is requested. This procedure is carried out not by a single controller, but by all voluntary “members”. Once validated, the “block” of changes is dated and added to the others in the registry. Finally, allow everyone to read the registry, and you have a block chain database.” Thus, it is up to the network (all peers) to validate and confirm each transaction.

HOW IS CRYPTOCURRENCY MADE?

People who make cryptocurrency are called miners. They are said to be undermining a cryptocurrency. Minors are an integral part of the process. Without them, the Blockchain would be frozen. A minor confirms the transactions that take place on the Blockchain.

For example, let’s say Peter gives Paul 3 Bitcoins. The transaction will be immediately broadcast on the peer-to-peer network, consisting of computers called nodes. However, it is only after a certain period of time that the transaction will be confirmed by the computers belonging to the networks using the algorithms specific to said Blockchain. Once validated, the transaction now forms a new data block for the registry. It is added to the others in the existing Blockchain, permanently and immutable.

How do I mine a cryptocurrency?

To mine a cryptocurrency, it is usually enough to install on his computer software using the processor or graphics card, or both, in order to solve the cryptographic problem requiring a relatively large computing power, which will allow you to touch new units of the cryptocurrencies in question.

Beware, however, the main cryptocurrencies have become too difficult for individuals to mine. The mining of many of them has largely become professionalized and takes place in part on Chinese farms, buildings of several thousand m2 where tens of thousands of servers rotate day and night to mine cryptocurrencies (Bitcoin, Litecoin, etc.).

BITCOIN, ETHEREUM, RIPPLE: THE MAIN CRYPTOCURRENCIES

The Bitcoin cryptocurrency, created in 2008 by Satoshi Nakamoto (without knowing who he is, whether it is a man or a woman, or even a single person or several) is the first of cryptocurrencies. It is a bit of a digital gold standard in the cryptocurrency sector, the benchmark in this area. The main cryptocurrency experienced a “fork” in August 2017. A disagreement in the Bitcoin community over the speed of transactions led to the birth of a new currency: Bitcoin Cash, which immediately rose to third place in the Top 10 cryptocurrencies and has remained in the Top 10 ever since.

Indeed, in parallel with Bitcoin, there are many other cryptocurrencies such as the Ethereum for example, which also experienced a “fork” in the summer of 2016. Ethereum, which is more comprehensive than Bitcoin, relies on all Blockchain applications because it can handle not only transactions but also complex contracts and programs.

Also mentioned is Ripple, which is not only a cryptocurrency (XRP) but also a transfer system that operates independently of the XRP token. Above all, it is a digital payment protocol designed to facilitate interbank payments. Litecoin ,Stellar, or Iota are also cryptocurrencies that regularly belong to the top 10 cryptocurrencies.

Since the creation of Bitcoin by Satoshi Nakamoto, about 3,000 cryptocurrencies have emerged. It should be noted that cryptocurrencies are numerous, that new ones can emerge and challenge the heavyweights of the sector, but also that disagreements within a community can lead to a “fork” (fork in French), a split within the community and the creation of a new currency from the technology of the old but by making changes.

2 Ways to Buy Your Virtual Currency

There are two ways to get encrypted currencies:

• selling a good or service and demanding payment in the crypto currency of your choice
• converting “classic” currencies (euro, dollar, etc.) into encrypted currency.

Kraken, or Circle, for example, make it easy to convert euros into Bitcoins or even other virtual currencies.

To convert your euros into Bitcoins, you will have to register on this platform by providing an electronic copy of an ID and a recent invoice (gas, electricity, internet) to prove your address.