The world of cryptocurrencies began to gain notoriety on the brink of a financial crisis in 2008. At that time it was difficult to think that a non-tangible asset could be the solution to unburden the economy. Far from state and international controls, people began to place their trust in this system.

The following is a general description of cryptocurrency, how it works and some curiosities.

What is cryptocurrency?

Cryptocurrencies are digital assets encrypted under a cryptographic code. Transaction and user data are protected by an unrepeatable numeric combination.

They can be defined by the following qualities:

Decentralization: they are not regulated by any private or state institution. The operational basis of the cryptocurrency exchange does not depend on a specific person or group. The entire community participates in the verification and storage of data in a shared network.

Blockchain: this network is known as blockchain. All transactions executed within the system are recorded there. The information is kept with cryptographic encryption.

No external support: as it is a decentralized network, it does not have any agency or legislation to protect the user. The authorities are not responsible for fraud, system errors, mistaken transfers or any other inconvenience.

How do they work?

The operating principle of cryptocurrencies is the blockchain. This is the name given to a technology that allows interconnecting various devices without assigning a central server. The task of each participant is to verify that the transactions are correct.

It is best to imagine the blockchain as a ledger where activities within the network are recorded. But in order for these to appear, they must go through a verification process. There are two ways of doing this. Among them we mention:

Proof Of Work, these belong to the blockchain. They compete in the resolution of an equation issued by the system. The first one who manages to do it gets a cryptocurrency as a reward and the privilege of registering the transaction in the ledger.

Proof Of Stack, is a new method that allows the verification to be done proportionally to the amount of coins the user owns. The greater the participation of a person, the greater the probability of adding a block to the chain.

How can we pay with cryptocurrencies?

Buying cryptocurrencies has become a convenient business because it allows us to pay with safe and instantaneous methods. One of the most widely used methods are wallets or exchanges. Indeed, exchanges like Changelly are an attractive alternative and will help you, for example if you are wondering "Where to buy nexo?" then similar exchanges will help you with this. They allow you to quote, buy and sell cryptocurrencies on the spot.

Platforms have also been developed that reach agreements with Visa and MasterCard to issue cards that debit cryptocurrencies and arrive in fiat currency to the seller.

Similarly, the platform can be used directly to formalize a payment with third parties. It is not necessary to use cards as intermediaries.

Countries and locations that accept cryptocurrencies as means of payment

A recent news item on the BBC website revealed that Texas has become the capital of cryptocurrencies. In view of China's harsh ban against these assets, investors have decided to move their activities to the city.

The reason behind this choice is that Texas recognized cryptocurrencies within its commercial law.

In June 2021 El Salvador joined the opening of digital exchange by forcing the country's merchants to accept BTC as a valid payment currency.

The United Kingdom has 40 Bitcoin ATMs. In the same vein, Denmark is studying the possibility of replacing paper money with BTC. Germany, Iran and Spain join this list.

Conclusion

Cryptocurrency is not only emerging as a secure payment channel, but also works as a backup for inflationary economies. 51% of online transactions in Venezuela, a country subject to an unprecedented inflationary reality, are carried out with Bitcoin. This has given the South American country an economic alternative in terms of investment.

The same behavior is also evident in Argentina, where the State is considering the option of popularizing the use of a local cryptocurrency currency.

This diversification in the use of the currency is the factor that has contributed to its growth and acceptance. Forecasts point to the use of cryptocurrencies to be on the rise until it becomes normalized as a medium of exchange.