A Guide To Cryptocurrencies And Coinbase
A cryptocurrency is a form of digital cash that relies on cryptography for multiple functions. Not only does cryptography form a net of security around the transactions, but it also verifies transactions and manages the creation of all units of the currency. It is a unique take on virtual currencies that confuses most and amazes the rest.
Most modern cryptocurrencies are entirely decentralized without any single managing organization, business, or committee. The entire system of users manufacturers the units of the currency together. The rate of production and value is known to all. Security is also handled by the public.
The concept behind cryptocurrencies has attracted investors for nearly a decade. Unlike standard centralized currencies, no bank, business, or government can produce additional units of the currency.
The obvious issue with cryptocurrencies would appear to be security. However, the validity of transactions and thus the integrity of all ledgers is maintained by the general public. People known as “miners” validate timestamps and approve transactions using their computers. They receive some quantity of the relevant cryptocurrency for this work.
The History Of Cryptocurrencies
Satoshi Nakamoto is credited with creating the first cryptocurrency, Bitcoin. It emerged as a pleasant byproduct of an ongoing project. The original goal was to create a completely decentralized digital currency. It was to use peer-to-peer sharing control spending instead of relying on a governing organization.
The creation of the decentralized cash sharing network would become the backbone of Bitcoin and thus all cryptocurrencies to follow afterward.
Cryptocurrencies were the tool that Satoshi used to prevent double spending. Double spending was the major problem that prevented companies from creating decentralized digital currencies in the past (something that had been attempted frequently since the 1990’s). Most companies eventually relied on a centralized server that would validate balances and transactions. Satoshi found away around this hurdle: cryptography.
To put it simply, every person using the cryptocurrency has a complete ledger of every transaction ever made and every other person’s balance. Anytime a transaction occurs it is broadcasted to every peer in the network and the ledgers are updated. That transaction remains as pending until it is confirmed. It is then added to the blockchain and cannot be undone.
These discoveries led to the creation of the cryptocurrency Bitcoin. Of course, it wasn’t long before other companies caught on and followed suit. Several new digital currencies would emerge over the following years.
The Three Big Players
Bitcoin, Ethereum, and Litecoin are the three largest cryptocurrencies on the web today. They each share a similar structure and function, but with some major differences. They each have unique advantages that attracts newcomers, miners, and investors.
Bitcoin, of course, is the oldest cryptocurrency around. It’s the classic staple and a great example of what a cryptocurrency should be. It relies on peer-to-peer networking to create bitcoins and validate ledgers. All people on the network validate transactions, “mine” the currency, and maintain the integrity of the currency. It has become the standard when referring to a cryptocurrency.
Ethereum, on the other hand, is more than just a currency. It is primarily a blockchain network that can be used for a variety of different applications. In comparison, Bitcoin is a blockchain network that focuses entirely on managing a digital currency. Ethereum does have a digital currency known as ether but that is only one of its many different uses.
Litecoin shares more in common with Bitcoin. It is a digital cryptocurrency released under an open sourced license. It does have some minor differences. For example, it processes blocks of currency at four times the speed of Bitcoin. It also has greater memory requirements because of its use of scrypt in proofing algorithms.
Where Can You Use A Cryptocurrency?
As the power and popularity of cryptocurrencies increases, so too does the number of places where it can be used. Several websites and online retailers have started accepting cryptocurrencies. Bitcoins, being the most common, are usually the first to be accepted by a website.
Many people decide to trade their cryptocurrency for actual cash. It is a volatile market, but can be very lucrative for those willing to study and learn. Many investors have earned a substantial income buying and selling Bitcoin as well as some of the other minor cryptocurrencies. There’s definitely some risk, but some of it can be mitigated by working with a digital currency broker.
What Is Coinbase?
Located in San Francisco, California, Coinbase is one of the world’s leading digital asset brokers. Coinbase primarily brokers exchanges of Litecoin, Bitcoin, and Ethereum, as well as a few other digital currencies. They broker the exchange of these digital currencies for fiat currencies.
Any investor hoping to earn a supplementary income or even make a profit cryptocurrencies should consider using the Coinbase brokerage firm. They offer buying and selling in 25 countries. Their digital wallet application is available in nearly 200 countries.
By using Coinbase, anyone can buy, sell, or trade the most common cryptocurrencies currently available. It’s one of the few reliable platforms for profiting from Bitcoin as well as simply buying the virtual currency for any other reason. If trading, buying, or selling from another user with a Coinbase wallet there is no fee involved.
Coinbase also provides an API that developers can use to create applications that accept cryptocurrencies as payment. If you’re an e-commerce owner who wants to incorporate Bitcoin, then this is one of the easiest ways to go about it.
The Best Way To Trade
Opening an account with Coinbase is fast, simple, and secure. You simply sign-up, link your bank account, verify your information, and start trading. You can begin with buying Bitcoin or moving your existing assets into your Coinbase wallet. You can access the broker site and service at any time using their secure website, Android app, or Apple application.
Not only is Coinbase easy to use, but it is highly secure as well. The majority of all customer funds are stored offline to prevent theft via hacking or loss due to digital errors. Bitcoin, drives, and paper funds are all stored in multiple geographical location with state of the art security measures. Coinbase is a great way to get started with Bitcoin and other cryptocurrencies thanks to its simplicity, flexibility, and security. Check out our review on Coinbase.