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How Crypto Works: A Simple Guide

How Crypto Works: A Simple Guide
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If you are someone that spends a lot of time on the internet, then it is likely that you have been unable to escape the world of cryptocurrency. It feels as though crypto has appeared out of nowhere and it is taking the world by storm, but the truth is that crypto has been around for some time now.

A lot of people actually chose to dip their finger in cryptocurrency in the early 2000s and crypto has been steadily fluctuating for some time now. However, it really gained attention in 2014, when sales of the popular cryptocurrency called ‘Bitcoin’ skyrocketed.

Though it is certain that you have probably heard of crypto currency, it is not guaranteed that you understanding. It is completely understandable as cryptocurrency is only just starting to hit the mainstream and it is not exactly something that we all learn about at school, so it can be extremely confusing. We understand how confusing it can be and sometimes looking for help online can only add to the confusion as most explanations are written on the basis that you have at least some knowledge of crypto.  We appreciate that not everyone has this basic understanding and so here is a simple guide to how crypto works.

What exactly is cryptocurrency?

If you are having a hard time understanding what cryptocurrency, the best comparison that we can make for you is the stock market.  You are probably familiar with buying stocks and how that works. When you buy stocks you do it on the basis of buying when the price is low and selling them when the price is high. Much like stocks, cryptocurrency doesn’t have a set price and so when you purchase it, you do so with the intention of selling it at a higher price in order to make a profit.

Cryptocurrency can also be used just like ordinary money and so you can use it to purchase products and services. It is in the name that it can be used as an alternative to ordinary money, as it is a type of currency. Depending on what the current worth of your cryptocurrency is, it can often be better to pay using your cryptocurrency and many services and businesses are starting to accept a variety of crypto currencies.

There are many types and they fluctuate in popularity

When people refer to cryptocurrency they aren’t just referring to one specific currency. There are a number of different cryptocurrencies and they all fluctuate in popularity. As I previously stated, Bitcoin was one of the most popular currencies for some time, but that is not the case as the worth of currency changes every minute.

Dogecoin and how it gained popularity

Currently, the most popular cryptocurrency is Dogecoin. Dogecoin is actually based on the very popular internet meme ‘Doge’, which was initially made as a joke and was supposed to be a commentary on the world of cryptocurrency.

So many people enjoyed the idea of Dogecoin that it actually started to take off and a single Dogecoin was worth sixty eight cents at one point. This may not seem like too much, but many people bought hundreds for less than a cent  and so they have managed to make a tasty profit. Dogecoin’s worth is very dependent on its internet popularity and so it can be tricky to know when to buy and when to sell, we recommend that you take a look at this guide about buying dogecoin as it will make the buying process much clearer and will allow you to gain a better understanding of the currency.

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