What are Cryptocurrency and Cryptology?
Cryptocurrency is a digital, online, and decentralized currency that can be used to purchase goods and services. Cryptocurrency has been on the agenda of countries and companies in recent days, is taking firm steps towards becoming the currency of the future, although it worries some governments and companies.
While talking about this topic, we need to know what cryptology is to better understand where crypto money comes from. Cryptology is the science of encryption. It is the encryption of data according to a system. Cryptocurrencies are transferred through the creation and decryption of passwords. Algorithms such as Hash functions are used.
Like online banking, cryptocurrency networks use mathematical methods called strong cryptography, which converts user and account information into unintelligible code. Blockchain is one of the main technologies that distinguish crypto money systems from today’s online banking systems.
What is Blockchain?
Each data on users’ names account information and money transfers are encoded in different virtual blocks and access to this blockchain is only possible by the user himself. Blockchain technology is what makes cryptocurrencies independent and untraceable from the central authority. Blockchain is used by many financial institutions and organizations, including central banks, thanks to the high security and transaction speed it provides.
In short, it is a system that eliminates the monopoly of the verification process by converting the verification process that governments provide to us for a fee to passwords on virtual blocks. The money obtained from this validation process is called crypto money.
How is cryptocurrency produced? What is cryptocurrency mining?
The cryptocurrency production process is mining. In other words, just as excavations are made to extract ore from the underground, mathematical problems are tried to be solved by software to find crypto money.
If you have the necessary technological systems, basically processor power, and an internet connection, you can be one of these manufacturers. Everyone has the right to decrypt and produce cryptocurrencies. There are many crypto exchange systems where the produced cryptocurrencies are traded. The main ones are Binance, Bitlo, Kucoin, Bitexen …
How does the value of cryptocurrencies change?
In cryptocurrency exchanges where the free market model is fully implemented, the price of each token is automatically determined by the supply and demand created by the buyer and seller. Those who want to both buy and sell coins can place a transaction order at any price. This is a basic economic principle.
When a cryptocurrency has a large supply of cryptocurrencies with little demand from investors and users, the value of the cryptocurrency falls. In the opposite case, the value decreases.
Additionally, Transaction Volume is also an important factor for this value. The transaction volume, which is calculated at certain intervals on a daily, weekly, or monthly basis, is important data showing the most common use of crypto money. The higher the volume, the higher the reliability and the resulting value.
Also, Media or public sentiment has a huge impact on the price of cryptocurrencies. If a cryptocurrency or platform comes to the fore with negative news, you will often see the price of that cryptocurrency drop.
What is an altcoin?
The first cryptocurrency was released as Bitcoin. The success of Bitcoin paves the way for other digital coins, which now reach 5000 different types of coins. These coins are traded as altcoins. Dash, Ripple, Ethereum, Litecoin, or any other type of coin other than Bitcoin are called altcoins.
Points to consider when buying cryptocurrencies
The first point you should look at when investing in altcoins will be the project’s white paper. The white paper is a document containing technical information such as the problems that the crypto money project aims to solve, how the project found a solution to these problems, the working principles of the project, and which architectural layers it works with. is document.
Additionally, the cryptocurrency you buy must be traded on which exchange. Because not every cryptocurrency is listed on every exchange.
There are many pages and individuals giving investment advice on the internet and social media. Doing your time analysis and investment plan is always the most reliable way.
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