What is meant by digital currencies?

What are Cryptos?
A digital currency is an electronic currency, which is designed to be exchanged between people in virtual transactions. Cryptocurrencies are available in the form of data and not as physical objects. In fact, you can’t keep bitcoins in your hands or ethereum in your locker. Owning a bitcoin means that you have a collective agreement from every ready computer on the bitcoin network that you currently own and most importantly, that it is legitimately created by a miner. AvaTrade is an industry-leading broker with some of the best trading conditions available, including the lowest crypto spreads in the market.

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What do prospectors do?
Cryptocurrencies are treated as money but are mined like . Mining is simply checking the encryption process. People all over the world transfer cryptocurrency from wallet to wallet, while miners use computer processing power to maintain a blockchain database and verify these transactions.

When miners release a new digital currency, the founders of these coins announce the number of coins to be mined. Once the specified quantity is reached, no more coins can be produced. The first digital currency that was introduced was Bitcoin, which to this day still represents a standard for all other digital currencies. Among the other digital currencies that made their way into the world of famous digital currencies, we mention: Ethereum, Ripple, Litecoin, EOS, and a number of fork currencies such as
Bitcoin Cash Bitcoin Gold

Blockchain – the technology behind digital currencies
Unlike traditional transactions, digital currency transfers are not exchanged by banks or other financial institutions. Every time someone makes a payment with an electronic currency, the payment is recorded on a digital record called a blockchain

What is a blockchain?
It is a list of transaction records, called blocks, which are encrypted and linked together. The blockchain is constantly growing and is completely open to anyone. Each block in the blockchain contains:

  1. Details of the sender and recipient and the amount of e-currency
  2. “Hash” means a combination that acts as a unique fingerprint
    3.Hash the previous block in the chain
    When a new block is created, it is sent to all users in the network. Next, each user validates the block and then adds it to the blockchain.

What is the Tangle technique?
The biggest problem with the blockchain is its reliance on miners. This is the reason why IOTA was called a digital currency (The Internet of Things application) and was created in 2016. IOTA also fights against increasing transaction fees and network scalability. The IOTA blockchain is called Tangle. It is a blockchain without blocks and without chains. In this system, users are themselves responsible for validating transactions. This means that there is no need to obtain approval from the miners; Users enjoy zero-fee transaction and increased processing speed.

Why trade digital currencies?
The trading platforms provide all traders with the opportunity to trade a wide range of digital currencies (Cryptocurrencies) that are on top 24/7. Cryptocurrencies have become a traditional and well-known asset due to the huge popularity they have gained over the past two years. The main objective of this new technology is to allow people to buy, trade and invest without having to rely on banks or any other financial institutions.

Altcoins
Alternative digital currencies or what is known as “Altcoins” is a term associated with digital currencies, the currencies that were successfully launched after Bitcoin. At first, these coins were just imitations of the original Bitcoin. But today we have more than 1,000 alternative currencies, and the list is constantly growing. Most cryptocurrencies were launched following an ICO (Initial Coin Offering – a form of crowdfunding) where developers raise funds by offering a limited number of initial coins to fund technology development. So far, besides the list below we can find other names like Namecoin, Peercoin, Bytecoin, Deutsche eMark, Novacoin, Cryptogenic Bullion, Quark, DarkCoin and Mangocoinz (for smartphones)