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Cryptocurrencies they arouse great emotions and awaken images of great profits. For some, they are associated with making money online or mysterious money, which does not exist, and yet naive buy it for hard earned cash. Contrary to the opinion of laymen, cryptocurrencies are not a machine for secretly earning money on the Internet. It is rather a revolution in the world of finance and banking, a new economy that will soon affect everyone.

The article is part of free training - Cryptocurrencies how to start and survive - a course for everyone!

A brief history of the currency

Long ago, people invented the currency so as not to have to exchange goods for goods. They agreed that gold, silver and other precious minerals have value and are exchangeable for goods and services. For convenience, they began to mint coins from them. However, they too turned out to be heavy, and their pouches were bulky.

The economy was growing, the population grew rapidly, and the role of the state was growing stronger. Central banks were established. Instead of carrying gold, we give it to public trust institutions and in return we get a paper (banknote) certifying that we are in possession of capital for some value, secured in gold kept in the vault. Since then, we have a lightweight and handy wallet with a few papers with specific denominations.

And everything would be great if central banks did not one day they have departed from the gold parity. The papers ceased to have a coating in ores. From this moment you can print any number of themregardless of the amount of gold in the vault. The value of a paper with the word dollar, euro, pound, zloty is contractual. It is answered and guaranteed by the central bank, regulating interest rates, executing the so-called inflation target.

Then came the digital age. We can pay by phone, card or watch. The only thing that changes is the numbers on our account in the bank. Today, we even passed away from the paper, and how much money we have is determined by a financial institution's record in the IT system.

So, how much are these numbers worth the monitor? What if someone makes a mistake? Will a hacker break in?

What does the loan look like? Does the mint have to print a few thousand banknotes so that we can get a loan for an apartment? Is it enough for a bank employee in his computer to erase zero on our account and insert a sum requested by us in their place?

Sounds unbelievable? Read this this article. It is worth knowing how the current financial system worksto start looking at abstract virtual currencies somewhat differently.

At this point, it should also be added that the traditional currency usually lives only a dozen or so years. galloping inflation it can check its value to the equivalent of the paper from which the banknote is made (Polska 1989-1990, Argentina or Venezuela today). And even when the financial sector is holding tight and the economy of a given country is developing very well, the principles of the currency (central bank's inflation target) make its value fall.

What are cryptocurrencies?

Cryptocurrenciesotherwise cryptographic currency and/ or virtual currencies, To coins (tokens), ie accounting units, accounting based on a distributed database of a network character, i.e. technology blockchain. Sounds complicated? Well, more simply, on an example.

The traditional transfer of zlotys or dollars

Fiduciary currency (pour. fides - faith) you keep on your bank account? So whether you can use your funds depends on the bank. Activities of its ICT system, opening hours, availability of cash at an ATM, operation of the VISA network or MasterCard. Oh ... If you are a Polish entrepreneur, your account may be suspended at any time for 3 months by the tax office, only on suspicions.

OKAY. We assume that the bank works, he did not go bankrupt, nobody hacked his website or databases, so the numbers in the "account status" field are correct. There is money in the ATM, because we do not have the crisis that we saw recently in Greece, and the government has not decided to tax the savings of its citizens overnight, as it was in Cyprus. Everything is stable as usual and you want to make a transfer.

You want to send money to a friend. If a colleague has an account abroad, you will probably pay a lot for the transfer. Added to this is currency conversion, sometimes double. The bank must accept the order of your transfer. It will do it during working hours. Then make the transfer. The transfer will come to your friend's bank. There they will have to post it during working hours. If there is no doubt, the money sent will appear as numbers on your friend's account. If there is money at the ATM, he will be able to withdraw it.

How does this operation look like in the world of cryptocurrencies?

Transfer of cryptocurrencies

Virtual currency, e.g. Ethereum (ETH) you keep on your wallet. Only you have a private key that is access to these funds. Nobody can take them away from youif you do not give him your private key. These funds are beyond the reach of any government, tax office or bank. They are not stored on any single server that can be turned off, or a hard disk that can be deleted. They are stored in a distributed database, without a control center, a bank intermediary. They are part of a blockchain network, largely immune to hacking attacks and any falsifications.

On the other hand, you are your bank yourself. When you lose access to your funds, there will be no hotline to call to remind you of the password. If you make a mistake by making a transfer, you will not be able to undo it.

Nobody even knows you have Ethereumand even if he knows, he does not know the address of your wallet (equivalent to the bank account number) and is not able to find it in any database, because wallets / cryptocurrency addresses are anonymous - there is no name of the owner next to any of them. Besides, you can have any number of such free addresses, also at the same time. So, for example, 1 ETH can be stored on 10 different wallets after 0,1 ETH on each one, and none of them is directly assigned to you.

What should be noted. All data in the blockchain database is public. So you can clearly see how many funds are located on which address and which transfers were made between specific addresses. So to some extent, you can track the flow of funds, provided you have missing data. However, it also has a big advantage. The location of each coin in circulation is known. It guarantees us full transparency of the currency. And how many Polish zlotys is currently in circulation?

We make a transfer. We make transactions indicating from which portfolio address to which portfolio address we want to send the amount (eg 1 ETH). Cryptographic proof of ownership, that is our private key, we sign the transaction. The mechanism of consensus of a given cryptocurrency, i.e. the way of approving transactions, most often by cryptographic encoding of subsequent blocks, eg using the computing power of network computers' processors, checks whether our private key agrees and we have the right to dispose of funds accumulated on this specific wallet, which we have provided. Depending on the cryptocurrency, the whole can last from a few seconds to several or a dozen or so minutes.

 

In the case of the ethereum network, we set the amount of the transfer fee ourselves. In a certain amount range, the more we will pay, the faster the transfer will come. In other cryptocurrencies it may be different. There are also cryptocurrencies with completely free transfers.

For our transfer cryptocurrencies, as for sending e-mails, it does not matter if we make a foreign or domestic transfer. Sending cryptocurrencies is fast and cheap. We do not have to ask the bank for the grace, wait for the opening hours. The blockchain network runs continuously, 24 hours per day, 7 days a week. Anywhere and any time, we can use our resources. All you need is internet access. Nobody is able to stop our transfer or block our funds.

What other advantages have cryptocurrencies?

Cryptocurrencies - a revolution in the financial system

Do you want to buy stocks on the stock exchange? You must use the services of intermediaries. You must wait for the trading session to open. You cannot send the purchased shares abroad to sell on the local market. As a result, you have to limit yourself to a specific exchange - PKN Orlen shares You do not buy on the New York Stock Exchange and you will not sell in Shanghai. As a result, the liquidity of the traditional stock exchange is small. The same applies to various other securities.

How do you cryptocurrency? You create an account on the cryptocurrency market just as easily as e-mail. Alone, without intermediaries, you buy cryptocurrencies, eg tokens for a project related to artificial intelligence. Trade takes 24 hours per day, without restrictions and days off. Tokens bought on the Polish stock exchange Bitbay for PLN, you can transfer your own wallet to yourself at any time. You can also send them to the US Stock Exchange Coinbase (if they are listed there) or Binanceto exchange there for other tokens or cryptocurrencies.

tokenization shares of companies listed on the traditional stock exchange may be a revolution for the financial system. It carries with it ease of storage and transfer stencrypted securities. The brokers in the form of brokers will disappear. Trade will take 24 hours per day. With one click, every ordinary Kowalski will be able to invest in shares of companies from China, Thailand or Brazil, even symbolic 100 PLN. The liquidity of the market will increase, and for example, the companies listed so far only on the Polish stock exchange, will be able to attract investors on the global exchange market based on blockchain technology.

Types of cryptocurrencies - information

We now have over three thousand cryptocurrencies. Almost half of them can be counted as dead, i.e. they can not be traded on any stock exchange and / or the team has abandoned the project.

A full list of all active cryptocurrencies, creating a specific ranking of cryptocurrenciesbecause it presents them in order from the highest to the lowest market capitalization (the current cryptocurrencies in dollars times the number of coins or tokens in circulation), you will find in our ranking, on the Polish side of coinpaprica, the most popular, because the oldest coinmarketcap or Binance Info.

New cryptocurrencies they can be distributed for free to the project support community in airdrop or bounty actions. Most often, however, they are sold under the sale ICO, STO or recently IEOto get capital for further development of the project, marketing activities, remuneration for programmers, etc. After the initial distribution, cryptocurrency is listed on one or many cryptoclosure exchanges, where free-market price speculation takes place.

Cryptocurrencies can be divided into coins and tokens. Coins have their own blockchain, competitive in bitcoin or ethereum. Sometimes the team working on its own blockchain releases the token on the already existing blockchain, in order to conduct the ICO cryptocurrency, and in the next stage of the project performs the so-called. swap, that is, exchanging a token for a native coin of a blockchain created by itself. Most projects, however, do not need to create another blockchain, because the existing ones meet their expectations. Then just create a token, eg ethereum, EOS, or cardano. This token will be used in the products of a given project, using the benefits (eg smart contracts) of an already existing blockchain.

The tokens themselves can also be divided in many different ways. The most common are utility tokens, or utility tokens. They constitute building bricks in project fundraising (ICO). Then they find practical application in the products of the project. For example, they will pay for something on a platform created by the team or will be used in some specific product function. Security Tokens sold under STO to stokenizowane securities, which have value in some companies, in some assets (cash, shares, bonds) and entitle their holders to vote in certain matters or to pay dividends. An example of a token can be e.g. TUSD, ie a stenned US dollar, transferred to blockchain ethereum.

We can also divide cryptocurrencies due to the subject of the project and the application of the product.

Application of cryptocurrency

The most obvious are cryptocurrencies used to pay (NP. bitcoin). However, here we can also distinguish cryptocurrencies ensuring high transaction anonymity (Monero, Zcash, DASH). Fast cryptocurrencies about free transfers, suitable for micropayments (transfer worth tenths of a penny), e.g. dwarf. Kryptowaluty specializing in interbank and international settlements (NP. XRP).

In addition, cryptocurrencies they are used in various other projects, which is the aftermath of the usability of blockchain technology in the real economy.

We have cryptocurrencies, which are stokenized securities or shares, as mentioned above. Tokenizować we can also Real estate, companies, or finally people - here we have cryptocurrencies as personal tokens.

Cryptocurrencies can find application in supply chain, helping to track products and their originality. The obvious use of cryptocurrency is IOT - Internet of Things, i.e. the car pays a car wash or a gate on the highway, without driver intervention.

Cryptocurrencies are used in the electricity market in loans.

Cryptocurrencies also include tips on forums, shopping in games or assisting creators through participation in online collections for a new movie or record.

You can exchange it for a long time, from artificial intelligence, by services big datauntil after stable coiny, or tokens, which course is linked to a traditional currency, like the US dollar.

Where to buy cryptocurrencies - exchange

Buying Cryptocurrency on stock exchanges. Full step-by-step instructions on how to do it best, which exchanges are recommended, where and how to buy which cryptocurrencies, what is worth investing in - check out our free training - Cryptocurrencies how to start and survive - a course for everyone!

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Tokeny.pl is a cryptocurrency site run by a crypto team of enthusiasts. The main area of ​​our interest are cryptocurrencies, tokens, personal tokens as well as blockchain technology. On the pages of our website we will present independent cryptocurrency reviews and interesting articles from the market. In addition, we present the current rates of all critics. The site also has a multi-functional cryptocurrency calculator as well as traditional currencies.

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