Cryptocurrency basics you need to know before buying cryptocurrencies

A cryptocurrency is a “virtual” currency that operates without the intervention of centralised financial institutions. It can be used for purchases or as an investment. Some widely known cryptocurrencies are Bitcoin, Ethereum and Tether.

The term ‘cryptocurrency’ comes from its inherent system, whereby this currency system uses cryptographic techniques to ensure the secure buying and selling of digital tokens. In essence, cryptocurrency transactions are authenticated and documented on a ‘blockchain’ – an immutable digital ledger that tracks and records all broadcast transactions.

“At Bintense, we understand that interest in cryptocurrencies is growing, which is why we have created a secure and transparent cryptocurrency exchange system for all enthusiasts. Users can easily start buying cryptocurrencies and begin their digital currency journey with us through a quick registration procedure and a smooth verification process.

Understanding cryptocurrencies: how do they work?

If you want to start buying cryptocurrencies and get involved in this innovative field, here are some basic cryptocurrency concepts that you should know:

• The underlying technology of cryptocurrencies, i.e. the blockchain, is decentralised. Decentralisation means that there is no central authority, such as a governing body or financial institution. Cryptocurrency tokens are created, exchanged and tracked through a distributed peer-to-peer network.
• Cryptocurrency exists only in digital form, without any physical expression such as tangible banknotes or coins. It exists in the space of the internet. It is a virtual token whose value is largely determined by the market dynamics of those who buy or sell it.
• With a few exceptions, such as stablecoins, most cryptocurrencies are not pegged to real currencies, such as the US dollar, and are not backed by precious metals such as gold.
• As cryptocurrencies are supported by a blockchain that maintains a change-resistant record of transactions and ownership, the problem of duplication of holdings and double-spending is addressed.

The cryptocurrency ecosystem – key facts you need to know before buying cryptocurrencies

Technically, cryptocurrencies are created on the blockchain by several mechanisms, such as mining or construction. The most popular cryptocurrency, bitcoin, operates through mining, where miners use special computer equipment to perform the complex mathematical cryptographic tasks necessary to validate each transaction in the blockchain.

In contrast, in the case of a bet, participants, known as “stakers”, lock in a pre-determined amount of cryptocurrency tokens that can be considered as their bet. In return, they are given the opportunity to validate blockchain transactions and receive a reward.

In addition, while it is not necessary to know that cryptocurrencies have two types of keys (public and private), a basic knowledge of these concepts can be useful if you are planning to start buying cryptocurrencies. Think of a public key as the equivalent of an email address – it marks the ‘location’ of your wallet and makes it easier to send or receive cryptocurrencies from others.

On the other hand, a private key is a confidential and complex code that represents your personal access to cryptocurrency assets. By storing your private key, you preserve the ability to confirm ownership and use the funds associated with your public address. Giving anyone access to your private key would also give them control over any cryptocurrency associated with it. In a word, the security of your cryptocurrency is directly linked to the security of your private keys.

However, ordinary people may not need to go into such complexity and can easily buy or sell cryptocurrencies through online exchanges and platforms such as ours, Bintense. We believe that the world of finance is evolving rapidly, and the obvious way to stay ahead is to start buying cryptocurrencies and taking advantage of the new opportunities they offer.