What Is A Cryptocurrency?

The cryptocurrency is a value of trust in which the users are those who give them an amount according to their offer and demand; they are therefore a medium of exchange within a digital world to purchase products or services. From the outset, they seem to have many similarities with money, but this is not the case: the first big difference has to do with the fact that cryptocurrencies do not have the backing of a central bank or an economic entity.

Due to its nature, this new exchange system prevents specific, clear rules on the use, handling, purchase, and sale of these new forms of value.

Why Is It So Popular?

There are many stories about cryptocurrencies, just look a few minutes on the network to find stories of “success” on these “currencies”, some link young people who bought them a few years ago in a few cents and soon after obtained millions of them; some others mention them as the new economic system of the future, and so on. For example, in mid-2016, cryptocurrencies and especially bitcoin became popular in China, and hence its fame spread throughout the world, causing such a high euphoria that it led to unprecedented volatility.

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The Venezuelan case is also another famous case of these new values: it is mainly because when the Bolivar lost value and a significant amount of bills were withdrawn from circulation, some Venezuelans began to chart a new economic route and found refuge in the bitcoin These Venezuelans have been baptized as miners. It should be noted that in the Venezuelan case a great exchange of products that are scarce in that country through this currency has been achieved.

The Benefits Of Cryptocurrencies

The defenders of this system mention among their interests the low rates or even the full payment of taxes by this system. They also mention the existence of a “transparent currency” that acts outside monetary policies or interests and that has a value granted by users. In addition to the above, the emphasis is placed on the ease of trading where there are no monetary conversions, only a single value.

For some reason in recent days many media have mentioned some cryptocurrencies as the opportunity to become a millionaire which is very adventurous at the beginning, but is actually part of the promotion that is made to these digital currencies and that has had an impact about the millennial generation who have been told that this is the opportunity to become a new wolf on Wall Street.

Recall that the purpose for which the cryptocurrencies were created was the exchange and not speculation. And when things sound too good or too easy we find people who raise their expectations about their investments in cryptocurrencies and with that comes the frustration of not having become millionaires quickly or in a small amount of time.