How does cryptocurrency work, and which of the crypto is the best?

What is Cryptocurrencies?

Cryptocurrencies, also called cryptocurrencies or crypto assets, are a digital medium of exchange. However, it is entirely digital, using cryptographic methods to secure your financial transactions, control the creation of new units, and verify the transfer of assets.

Therefore, we can consider them as a decentralized alternative to digital currencies . By “decentralized” we mean that these coins are not controlled by a single service or company. The same happens with conventional currencies, centralized and organized by entities and banks, so they are an opposite method to both.

The first cryptocurrency was Bitcoin created by “Satoshi Nakamoto”, a pseudonym that corresponds to a person who nobody knows exactly who he is . This person published an article in 2009 in which he described a P2P payment system that he called Bitcoin.

How cryptocurrencies work

To understand how cryptocurrencies work, you must also understand several basic concepts. The first is that it is based on a decentralized computer network, which involves nodes distributed throughout the world with copies of all the transactions that have been carried out. The second concept is that of the miners, people who are part of the nodes, and who have the incentive that every time new Bitcoins are generated, they are distributed among those who are part of these nodes.

Another important concept is that of exchanges, which are companies that allow you to exchange currencies such as euros or dollars for Bitcoins and get into the world more easily. When you get them, they are stored in the ‘Wallets’ or portfolios, which are applications that allow you to save or exchange them.

Ethereum

Ether is the second largest cryptocurrency produced in 2015 , with a market capitalization of $316 billion, and is logically one of the best digital currencies to invest in. Ether may not be a cheap buy , but it’s worth it because it’s one of the best. Ethereum is an open source decentralized blockchain that allows users to create smart contracts. The platform’s active crypto is Ether (ETH) . After Bitcoin, it is the second largest cryptocurrency in terms of market capitalization .

The most widely used blockchain Development Company is Ethereum . It is credited with laying the foundation for what is now known as decentralized finance (DeFi) . Due to the early success of Ethereum, the blockchain is now used by a significant part of the DeFi industry.

polygonal

Polygon is an Ethereum compatible blockchain interoperability platform. The MATIC token remains central to this asset, one of the best cryptocurrencies to invest in. Polygon is a framework for creating blockchain networks that are interconnected.

The Polygon project is one of the most recent attempts at blockchain interoperability and scaling , and aims to alleviate some of the apparent limitations of projects like Polkadot and Cosmos. These characteristics allow it to become considered one of the best cryptocurrencies to invest in.

EOS

This smart contract platform claims to be able to execute millions of transactions per second while also eliminating transaction fees. It thus becomes one of the best cryptocurrencies to invest. Although EOS has considerable promise , Ethereum is its main rival and is now more popular.

IOTA

IOTA is an open source cryptocurrency and distributed ledger built for the Internet of Things, allowing it to stand out among the best to invest in. The marketplace has been created to allow companies to sell data in order to promote data sharing . Also, the market is blockless , which means that all transactions on the network are free . IOTA has been acclaimed due to these factors.

BitTorrent

BitTorrent (BTT), one of the best to invest in, is a cryptographic token that was created as an extension of the BitTorrent protocol . The BTT coin crypto platform is being developed to expand the capabilities of the protocol.

The BitTorrent team, for example, is working to make the infrastructure ideal for third-party application developers , value exchange, and fast, secure decentralized data storage.