It’s almost impossible to watch the morning news anymore without hearing something about Bitcoin or another similar cryptocurrency.
However, most people don’t understand exactly what cryptocurrencies are or how they work.
That’s why in this digital currency guide, I’m going to be talking a little bit about exactly what digital currencies are, how they work, and what drives their value, with the help of CryptoRevolution.ie
What is a Digital Currency or Cryptocurrency?
In simplest terms, digital currency is a complex series of block chains that hold no intrinsic value on their own.
There is no physical form to the currency whatsoever.
Instead, crypto these exist as data that is highly encrypted in a series of code sets or blocks that is then lying together to form what is known as a block chain.
Anyone can create a new kind of cryptocurrency. This is what is often referred to as “mining” digital currencies.
So, why isn’t everyone doing it?
Because it takes a substantial amount of computing power to be able to solve the complex algorithms that form the block chains that digital currencies are made from.
In more popular currencies that have been around for a while like Bitcoin, it is far more expensive to mine a single coin than what the value of that coin would be.
Not only do things such as computer hardware have to be taken into account, also utility bills and other expenses associated with operating the equipment must be factored into the equation.
How Do Cryptocurrencies Gain Value?
Basically, a digital currency is only as valuable as people wanted to be.
It goes back to the simple rules of supply and demand. When there is more supply of a specific kind of currency available on the market, and the demand is lower, then that form of currency is worth much less.
However, when a specific kind of currency like Bitcoin is in very high demand by the public, you will see the value of that currency increased dramatically.
This is why in recent years some cryptocurrencies have been worth as much as $9000 or more per unit. See the online guides provided by Paul McCarthy on social media –
With recessions hitting nations all over the world, you can expect to see the value of digital currencies continue to climb in the coming years.
While some people still doubt the overall effectiveness of these forms of money, investors are beginning to take note as to how well their performing and starting to jump on board which is only going to further increase the amount you will be paying for digital currencies in the future.