Are All Cryptocurrencies Basically The Same?

Cryptocurrency is a digital, decentralized type of currency that uses cryptography to secure and verify transactions on their respective networks. As of January 2019, there were more than 2,000 cryptos in existence. While all of these cryptos share certain properties, they differ in terms of their technology, privacy measures, and value fluctuations.

Cryptos Are All Digital

Cryptocurrency is a digital currency, and all cryptocurrencies are electronic. However, not all electronic currencies are cryptos. For example, there are popular electronic payment systems that allow you to send money online and make payments using your phone or computer, and they are not considered a cryptocurrency because they don’t use blockchain technology.

The same goes for many other types of digital currencies that exist today – they’re not considered a cryptocurrency because they don’t mainly use blockchain technology and/or don’t mine new coins with specialized computers called miners.

Cryptos Are All Anonymous

Cryptos are merely pseudonymous, which means that every transaction is recorded on a public ledger and tied to an address, but it doesn’t reveal who owns that address. However, some cryptos are more anonymous than others. For example, there is a crypto that uses zero-knowledge proofs so there’s no way for other people to learn anything about your transactions except the amount of money being sent or received by each wallet address.

Cryptos Are Traded On Online Exchanges

Cryptocurrency exchanges are online platforms where you can buy and sell cryptos. They’re regulated by government agencies, and they keep records of all transactions that take place on them. Cryptocurrency exchanges have rules about how to buy and sell cryptocurrencies, so make sure you understand these before deciding where to trade.

Cryptos Have Value Because They Are Scarce

Cryptos are considered by many to be scarce because they are digital and cannot be printed by all means. Other than that, cryptos are also scarce because they’re primarily decentralized, and their supply is controlled by a mathematical formula. In addition to being scarce, cryptos aren’t backed by any central bank or government – these new currencies only have value because people believe they do.

The Value Of Cryptos Wildly From Day To Day

And finally, the value of cryptos right now varies wildly from day to day, and often from hour to hour. So if you’re thinking about investing in a cryptocurrency, it’s important to understand how the price of every type of crypto can change so dramatically, so choose the right type of cryptocurrency to invest in.