Cryptocurrencies come in various names. You have probably heard of Bitcoin, Litecoin, or Ethereum. They are rapidly gaining popularity as an alternative for conducting online payments. However, before converting your hard-earned dollars, euros, or rubles into cryptocurrency, it is crucial to understand what it is, how it differs from traditional currencies, and why it all matters.
Cryptocurrency is digital money, serving as an alternative payment system based on encryption algorithms. The use of encryption technology means cryptocurrencies simultaneously function as a means to pay for goods and services and as a virtual accounting system. To use them, you need a cryptocurrency wallet – software that can be a cloud service, a program on your computer, or a smartphone app. The wallet is essential for storing encryption keys that confirm your identity, thereby linking you to your cryptocurrency assets.