Cryptocurrency is a digital form of currency that employs encryption techniques to regulate units of currency and the generation of this currency. This encryption is also used in the verification of the transfer of funds that operates independently from any bank.
How Cryptocurrency Works
This type of currency is produced by the system collectively and the rate of the currency is defined by this system and is publicly known. With paper currency, the Federal Reserve, the government and corporate boards control the supply.
However, cryptocurrency is decentralized and created by groups or individuals. And these types of currencies are designed to, over time, decrease the production of actual currency, making a cap on what the total currency will be in circulation.
Types of Cryptocurrency
Of the many options available, some are coming on the market that have unique applications. Ethereum, for example, is a platform that is open source. It allows developers to create these decentralized currencies or applications.
At this point most websites and applications are centralized. This simply means that an entity or individual has full control over any data that has to do with the application.
How Ethereum Works
Eliminating the client-server relationship is what the company strives to do. In essence, there is no one entity that has complete control over the application or maintaining any data related to the application.
The Ethereum blockchain would take over the responsibility of these tasks (a blockchain is a group of users on a network). And these users, or ‘nodes’, work in tandem to keep the data and application storage public on the blockchain. The nodes on this network wil, in turn,n earn ‘Ether’ – a cryptocurrency that can be used on the network to pay fees or this currency can be sold in exchange for other cryptocurrencies.
A blockchain is a mathematical equation that computers try to solve.
Once the equation has been solved, the block will be completed. Smart contracts are a facet of this blockchain technology, and this type of contract has the ability to disrupt large industries such as real estate, banking and government operations.
These contracts are a piece of code that can be executed based on set triggers that, in turn, will perform an action. The benefit of this to a business is that no authority can reverse this execution. And once the smart contract is active on the network, most of the network must approve any change, which is almost impossible.
This code could potentially take power from a select few people or corporations and give power to public masses.
Where to Buy Cryptocurrency and Ethereum
CoinSpot is among one of the choices for buying Ethereum. CoinSpot has a user-friendly platform and online wallet. The benefits of an online wallet are that it makes trading cryptocurrency simple, especially for new users. Check out this Ethereum guide to see the benefits of using CoinSpot and Ethereum, particularly for Australian users.
How to use CoinSpot
First step is to set-up an account, and then enable 2FA – this message should be located at the top of the page on the dashboard.
Second, verify the account that was just set up. There is a six-step process for this verification, and information will need to be uploaded, which is a requirement for any exchange. This is all to ensure the safety of everyone using the platform, and to hold said people accountable.
Third, a bank account will need to be connected to buy coins. Lastly, begin buying coins. CoinSpot will list all available cryptocurrency for purchase. Once the currency has been purchased, move it to a hardware wallet if it is going to be kept, if not, it can be kept on the CoinSpot platform.