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What are digital currencies and how to obtain, own and benefit from them

 What are digital currencies and how to obtain, own and benefit from them

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Who among us did not hear recently about digital currencies or cryptocurrencies, especially Bitcoin, which witnessed a fictional rise late last year and early this year that these currencies had not seen before and shattered all economic figures in growth rates, especially in this period that the global economy is suffering from recession And a severe deterioration of the health consequences of the pandemic that the world is witnessing.

One of the things that contributed to this increase is the high demand for it, especially the large turnover of the owners of large companies on dealing in digital currencies.

This is what made us address this topic in order to give you a detailed picture about digital currencies and try to answer all your questions ... including:


  • What are digital currencies?
  • What are the types of digital currencies?
  • The benefits and disadvantages of digital currencies?
  • How to deal with digital currencies and buy using digital currencies?
  • And many other questions that we will try to answer in this article?


Introduction :

I have often heard that the world of cryptocurrencies or Bitcoin is a dangerous, dark world or field dominated by a lot of fraud and misconceptions such as:

  1. A tool for speculation and quick profit
  2. Method for laundering money
  3. Money has no origin or existence

In fact, it is much bigger than that. It is a technology that will change many things in our world. I will try to explain it under this tweet in the coming days.


So what are Bitcoin and digital currencies?

Before answering this question, we must understand what money basically is? Is it the piece of paper you have in your wallet? Or is it the numbers in your bank account?

Money, in its essence, is nothing but a means of expressing “value”. The paper and the numbers themselves are worthless.

So where does the value of money come from? It comes from people's confidence that these papers and numbers have value.

Imagine that you go to a restaurant on the street and try to pay for it with the money from the Monopoly game, the seller will look at you as if you are crazy. But this same in-game money has value and can be used to purchase land

Another example from inside prisons, inmates in most of the world's prisons deal with cigarettes as their main business. Simply money is anything that is unanimously agreed upon as money from a segment of people.

Among the important qualities that increase the chances of a "thing" being money are:

  1. Ease of transportation
  2. Exchange (meaning that there is no difference between the value of one dollar bill and another $ 1 bill)
  3. Is divisible
  4. Limited in supply, it cannot be issued easily.
  5. Difficulty with forgery.

These characteristics made gold the main source of expression of value since 600 BC until the beginning of the establishment of the modern international system, with the beginning of the emergence of many countries in the modern concept, each country has issued its own currency, from 1914 to the present day the American dollar is considered the currency Number one in the world.

The value of the dollar was associated with gold, which is known as the "gold standard", where gold was the basic money "M = 0" and the US dollar "M = 1". The main reason behind applying this standard is to remove the influence of politics and human emotion on a sensitive matter. It is very much the fiscal policy of the state.

This standard was discontinued in 1974 and the US Federal Reserve became free to print dollars without any restrictions in the sense that the US dollar became "M = 0"

What many people are ignorant of is that the numbers in their bank account are not real money, but rather a "promise" from the bank that this amount of money is in your account, but the bank does not have real money to cover all the existing accounts, even if all people go to withdraw money From the bank in the same period will produce a financial crisis.

Therefore, until 2009, the real money in the world is coins and gold. Then the world's first cryptocurrency, Bitcoin, appeared.

In the coming days, we will explain # Bitcoin, God willing, but this is an introduction that must be known in order to reach the correct understanding of this technology.

We return to the Essential Question.

What is Bitcoin?

Quite simply, Bitcoin is a protocol for expressing value over the Internet, we all use online protocols on a daily basis, such as email and http.

Bitcoin is divided into two parts:

  1. Bitcoin (BTC)
  1. Bitcoin Blockchain


The "Bitcoin network" is the means by which the "Bitcoin currency" is transferred from one person to another all over the world, and all transactions are registered in the network.


So what is the Bitcoin advantage?

Scarcity is the basis of the value of anything, if gold was everywhere, it would lose its value because its value is in the scarcity of its existence, before Bitcoin it was impossible to have digital scarcity, everything online you could copy it easily and with the click of a button.

Without going into technical details to avoid complications, Bitcoin has managed to create digital scarcity through a combination of technologies, the most important of which is encryption technology, which is the basis on which all digital currencies are based.

Among the rules in the Bitcoin network is that the amount of Bitcoin supply is impossible to exceed 21 million currencies, which means that with the passage of time its value will increase because no one can print more Bitcoin like what central banks do around the world.

Also, before the emergence of Bitcoin, it was impossible to transfer value over the Internet without the presence of a third party to perform the process and preserve the rights of both parties, for example if you want to transfer an amount of money to a person in another country, you must use an intermediary such as banks or financial intermediation companies, which takes a long time and High commission on every transfer

The Bitcoin network allows individuals to quickly transfer directly without the need to use an intermediary as long as the two individuals are connected to the Internet, this thing is done through an algorithm known as "Proof of Work"

At this time when most commercial activities are practiced on the Internet, it is logical that the money used in the Internet is the same from the Internet without international limits and restrictions, the Bitcoin network has laid the foundation on which this new system will be based, but the matter does not end with it.


How to get digital currencies


In order to obtain some digital currencies such as Bitcoin or Ethereum and many others, there are many free and paid methods, as well as investment in establishing digital currency farms, and each method has its pros and cons.

  Ways to obtain cryptocurrencies?


  1. The first method: Trade cryptocurrencies directly
  2. The second method: buying cryptocurrencies through the stock market
  3. The third method: Buying Bitcoin from the futures market
  4. Fourth method: Buy Bitcoin from the options market
  5. Fifth method: mining digital currencies


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Conclusion

In recent times, the world is witnessing a great demand for digital currencies as a means of future payment and the possibility of legalizing them to be used in trade and stock exchanges, with the presence of a central authority running the payment process without financial compensation, and therefore digital currencies have now imposed themselves and have become an indispensable reality.


Do not forget to leave us a comment about your opinions and ideas in the field or questions about working in the field of self-employment.

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