What are Virtual Currencies? - Bitcoin, Ethereum, Criptomonedas

Cryptocurrencies, or virtual currencies, are virtual financial assets that are secured through cryptography, this system ensures that they are not duplicated or spent more than once.

Many of the virtual currencies or cryptocurrencies are decentralized using blockchain technology,the blockchain consists of several computers that keep and control the accounting records of transactions.

Another feature is that cryptocurrencies are not generated by any central bank or manipulated by any government.

The ultimate authority is the system that controls each transaction. The system automatically audits which wallets each cryptocurrency has and ensures that they are not spent more than once.

What is blockchain and how does it work that makes it so secure?

When buying, the block will contain the date, time, amount of the transaction and the participants of the transaction.

In the case of Bitcoin or other cryptocurrency, only the wallet it comes from and where it goes will be visible. The owner is 100% anonymous. Each block is differentiated by a unique code called “Hash”, which are cryptographic codes generated with special algorithms.

Nodes / miners do their job to confirm or deny operations. If an operation is verified the nodes that are connected to each other give Confirmation that it is correct. If a node attempts to confirm an invalid transaction, it will be automatically penalized and temporarily excluded from the network.

Each block is stacked one on top of the other and in chronological order and interconnected with a previous operation.each block contains a hash number that is part of the hash calculation of the new block.

Types of virtual currencies

There are different types of cryptocurrencies. Each one has characteristics that make them special, with significant variation.

Over time, each coin confirms and reinforces its market value and integrity. Some characteristics are mentioned below:

For example, Bitcoin was the first to offer a decentralized and reliable cryptographic system.

Etherum was the first to develop a coin integration with smart contracts (Autonomos).

Ripple enables financial institutions (such as banks and exchange houses) to reduce costs and achieve faster transactions.

ALTCOINS , are all the currencies that came out after Bitcoin that have different characteristics and particularities.

ICO’s are an acronym that refers to Initial Coin Offerings, which were created to finance new projects.