In this article we will talk about what to know about cryptocurrencies since people’s interest in this new technology and digital currencies has increased rapidly in recent time.
The cryptocurrency, also called virtual currency, is digital money. That means there are no physical coins or bills; everything is online. You can transfer cryptocurrency to someone on the internet without an intermediary, such as a bank. The best known cryptocurrencies are Bitcoin and Ether, but new cryptocurrencies continue to be created every day. Bitcoin, the highest value cryptocurrency on the market, was created in 2009 by Satoshi Nakamoto as a means of payment. Nakamoto also invented blockchain technology that supports the management of bitcoin transactions.
People use cryptocurrencies to make quick payments and to avoid transaction fees. Some people might acquire cryptocurrency as an investment, hoping that it will increase in value. Cryptocurrencies can be purchased with a credit card or, in some cases, through a process called “mining.” Cryptocurrencies are stored in a wallet or digital wallet, either online, on your computer, or on another physical medium such as a cell phone.
Cryptocurrencies have several differentiating characteristics compared to traditional systems: they are not regulated or controlled by any institution and they do not require intermediaries in transactions. A decentralized database, blockchain or shared accounting record is used to control these transactions.
Many students on the Greenville University campus are followers of this new trend. Alejandro Aguilar is one of them, and he told us that he’s been following the values of his cryptocurrencies since the pandemic began. “It’s a new hobby for me. The value of a cryptocurrency can change every hour. An investment that today can be worth thousands of dollars tomorrow could be worth only hundreds of dollars. If the value goes down, there is no guarantee that it will return, go up. So I have to know when is the right time to redeem my bitcoins.”
The still limited but growing ease of buying and selling bitcoins and its acceptance as a means of payment are normalizing the use of this asset by the general population. In the United States, users of platforms such as Square and PayPal can buy, sell and store Bitcoins and other cryptocurrencies such as etherum, bitcoin cash and litecoin. On the other hand, throughout 2021 PayPal will allow the use of cryptocurrencies as a means of payment in the more than 26 million businesses that work with this platform. In Europe, BBVA has recently announced that, starting next year, its clients in Switzerland will be able to buy, sell and hold Bitcoin deposits.
As it becomes easier to carry out commercial transactions in bitcoin, its use as a means of payment will tend to spread among the population, especially in international payments, in which cryptocurrencies provide clear advantages: they eliminate the costs and risks related to transactions in currencies and provide speed in making and receiving payments. However, it must also be taken into account that fluctuations in the price of bitcoin, sometimes dramatic, make it difficult to use as an advantageous means of payment.
Article by: Christian Fuentes, Ruben Martinez, Luis Carlos Duran.