To understand what cryptocurrencies are and how they work you first need to understand how the current economic system works.
Paper money has no intrinsic value. This means that a bill or a currency only represents the value we give it. This system works because as a society we have decided to trust and accept that paper money represents a value, and we can use it to exchange it for services or goods. Under this same principle, and since having large amounts of bills and coins would be inconvenient, we rely on banks to keep, manage, send, and invest our money. Thus, we rely on banks and other services to complete many of the transactions we carry out every day. This trust system represents a risk to us because when we use a bank, we lose sight of our money creating situations that can cause potencial financial disaster like in 2008. Not only do we trust institutions that can become bankrupt (which means a total or partial loss for its users), but there are also millions of people who do not have access to this system.
Cryptocurrencies were created as an alternative to traditional money. These, also known as crypto, are the first decentralized digital currency. Its operation is based on blockchain technology that allows the exchange of cryptocurrencies from user to user without intermediaries or banks. Cryptocurrencies work thanks to blockchain technology, which in turn, functions as a network of participants that keep information safe and accurate through mining and cryptography.
The first cryptocurrency was launched in 2009 with the goal of allowing users to complete transactions without all the restrictions and disadvantages that the banking system presents. What the creator of Bitcoin achieved with the first cryptocurrency was an exchange system that allowed fast and secure transactions. In its beginnings, Bitcoin did not exceed 1 USD in value. Today 1 Bitcoin exceeds the value of 10,000 USD. The price of a crypto will always depend on its market demand. This means that we do not know what its value will be in the future, and that the price might fall or rise without warning. Today, the use of cryptocurrencies is not massive. Even so, the market has grown rapidly since the beginning because many users consider the benefits of cryptocurrencies greater than the disadvantages.
The large number of cryptocurrencies on the market can cause fear or insecurity; however, there are many companies and services that make buying, selling, and exchanging cryptocurrencies very simple. We recommend that you first learn about the wallets or currencies that interest you. Once you know and understand the options out there, you can join the crypto-world safely.