Cryptocurrency is a relatively new term, which have emerged in 2008. Generally speaking - it is a digital currency. Main principles of nearly all the cryptocurrencies are:
- decentralization of emission / control bodies;
- application of various cryptography methods;
- collective systematization.
Cryptocurrencies usually have no common emission and controlling bodies. No national banks or other governmental structures has any direct control over cryptocurrency emission and value. This explains why it’s value and general status are set solely by a theoretical consensus of all it’s holders.
Modern blockchain technology
Blockchain is a system that records all transactions in relation to the cryptocurrency. The system contains modules, each called “block”. Every block represents a decoded record of a specific cryptocurrency related transaction. It also contains a coded reference to the previous block, which consecutively contains a record regarding the previous transaction. As a result, all the information regarding transactions and manipulations done with certain units of a single cryptocurrency can be followed back to the original entry. By performing such backtrack - it’s validity can be verified. You need to consider that the blocks and entries cannot be altered once they are registered, making it impossible to impact / modify the whole chain, making it a safe and elegant solution to digital transactions.
Cryptocurrency trading
Despite the fact that there are several different cryptocurrencies, each serving different purposes and utilizing slightly variative methods, there is a common set of rules worth following, when dealing with cryptocurrency trading:
- learn as much as you can about the blockchain and it’s main principles;
- study about the most popular cryptocurrencies and their advantages;
- carefully evaluate your possibilities and possible risks;
- stay updated about financial and cryptocurrency related news;
- create an exchange account for crypto trading specifically;
- start off by dealing with smaller amounts to study the market;
- always research and keep improving your knowledge;
- eventually try trading with larger numbers, implement complex solutions.
Cryptocurrency mining procedure
Crypto mining is a general way to refer to a process of transaction validation. It is usually performed by utilizing computing powers to make specific calculations within a common mining system. For contributing calculating powers miners are usually rewarded with certain units of cryptocurrency being mined. Such mining impacts and increases the overall number of cryptocurrency in the turnover, affecting it’s public value.
Cryptocurrency payment solutions
Since cryptocurrencies have rapidly emerged only a decade ago, the national governments so far had almost no chance to properly react and adopt bills and regulations in relation to cryptocurrency utilization, as a result, most of the public services could not be paid in crypto. However, as the value of many cryptocurrencies increased - many governments started showing increased interest in BitCoin and few other cryptocurrencies. Numerous companies and financial institutions have started actively developing and implementing crypto-based payment platforms and other solutions, some of which were requested by the official governments.
Initial coin offering (ICO)
ICO is a non-regulated crowdfunding based joint venture aimed to raise funds for a newly established cryptocurrency. It is often used by new companies to avoid capital-raising process involving search for investing parties, often required by traditional investors or banks. During an ICO campaign, certain percent of new cryptocurrency is acquired by the early investors, gaining a legal tender or other cryptocurrencies in exchange.
Cryptocurrency exchange license
In order to setup and operate a cryptocurrency exchange venture, a person does require a licence first. The procedure to be undergone heavily relies on the jurisdiction your company is going to operate from. However, there is usually a set of common requirements, which must be met in any jurisdiction regardless.
- establishing party’s ID verification;
- full compliance with anti-money laundering regulations and policies;
- partnership with a bank or financial institution in order to set up an exchange to fiat currency.
Many jurisdictions offer several different licences: one for cryptocurrency exchange and second one for operating crypto wallets. Prior to acquiring cryptocurrency license it is essential to understand your ultimate goals and operations you want to perform.
Banking with cryptocurrencies
When it comes to cryptocurrency payments - conventional banking still struggles to offer efficient legal solutions. General tendencies and modern practice show that some economic systems are quickly embracing and implementing cryptocurrencies into their national payment platforms.
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