Cryptocurrencies, what are they, benefits, and risks.
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Course
Primero
Institution
Universidad De Las Palmas De Gran Canaria (ULPGC)
In this judgement/summary, you will have a better understanding about the world of cryptocurrencies, and cryptomoney, such as the origin, how are they developing, their advantages or risks.
This information, is not only very useful for preparing an exam or certificate, but also in order to havin...
Cryptocurrencies have become an increasingly popular topic in recent years, with many
people investing in them and using them for transactions. In this text, we will explain what
cryptocurrencies are, how they work, and their current state.
● What are cryptocurrencies?
Cryptocurrencies are digital or virtual tokens that are designed to function as a medium of
exchange. They use cryptography to secure and verify transactions as well as to control the
creation of new units. Cryptocurrencies operate independently of central banks and are
typically decentralized.
The first and most well-known cryptocurrency is Bitcoin, which was created in 2009. Since
then, many other cryptocurrencies have been developed, such as Ethereum, Ripple, and
Litecoin.
● How do cryptocurrencies work?
Cryptocurrencies work using a technology called blockchain. A blockchain is a decentralized
digital ledger that records transactions and maintains a continuously growing list of records,
called blocks. Each block contains a timestamp and a link to the previous block, creating a
chain of blocks.
In the case of cryptocurrencies, each block contains a group of transactions that have been
verified and added to the blockchain. When a new transaction is made, it is broadcast to the
network of computers that are connected to the blockchain. These computers then use
complex algorithms to verify the transaction and add it to a block. Once the block is added to
the blockchain, it cannot be altered.
To use cryptocurrencies, users need to have a digital wallet, which is essentially a software
program that stores their cryptocurrency. When a user wants to send cryptocurrency to
another user, they initiate a transaction using their digital wallet. The transaction is then
verified by the network and added to the blockchain.
● What is the current state of cryptocurrencies?
The current state of cryptocurrencies is complex and constantly evolving. While
cryptocurrencies have gained significant popularity in recent years, they are still a relatively
new and volatile asset class. Their value can fluctuate dramatically, sometimes even on a
daily basis.
One of the main challenges facing cryptocurrencies is regulatory uncertainty. Many
governments and financial institutions are still grappling with how to classify and regulate
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