Since the emergence and rise of bitcoin, digital currencies have attracted the attention of many people, including companies and investors. However, this technological novelty is still not very well known, so it is important to find out what cryptocurrencies are.
In this sense, it is worth exploring relevant aspects of this topic, such as usefulness, security, operation and access to these assets. For businesses, it is also necessary to consider these digital assets because they can become forms of payment.
If you want to understand once and for all what cryptocurrencies are, what they are for and how they can be used, keep reading!
What are cryptocurrencies?
When thinking about financial transactions, it is common to think of traditional modalities, such as credit or debit card, cash, among others. In addition, in recent years the payment process has evolved and new possibilities have emerged.
Already outside the centralized and conventional market, cryptocurrencies or digital currencies emerged. They are a type of currency that do not exist physically, being present only in the virtual environment.
However, as with physical currencies, such as the real and the dollar, it is possible to carry out financial transactions with them. If a friend or relative has cryptocurrency and wants to send it to you, it’s possible.
Furthermore, cryptocurrencies are decentralized. This means that there is no institution that regulates these assets. In fact, cryptocurrency operations take place directly between the parties, without the involvement of the Government or central banks.
What are cryptocurrencies for?
Now that you know what cryptocurrencies are, it’s worth understanding what they are for. As you have seen, digital assets can be used in financial transactions. So, if a store accepts this type of currency as a payment method, customers can purchase products through it.
In this case, you do not need to use a card, cash or other means to purchase products or pay for services. In addition, cryptocurrencies can be traded on the financial market , bringing opportunities for investors.
The possibility of making gains with these assets exists because the price of cryptocurrencies fluctuates. Therefore, it is possible to take advantage of these movements to make operations, with the focus on buying in the low and selling in the high, obtaining profits.
How safe is cryptocurrency?
As it is a type of currency that not everyone knows very well, it is natural that there is a certain fear about the security of cryptocurrencies. After all, this is a new and different way of carrying out financial transactions.
In this sense, it is interesting to know that cryptocurrencies are usually validated through a technology called blockchain. It consists of a mechanism that acts through blocks of data, whose formation occurs, normally, after the resolution of complex mathematical calculations.
This means that, with each transaction, a new block is formed, with its inclusion in the system. In addition, the next block brings information from the previous one, creating a robust validation chain. Therefore, the blockchain is a very secure network.
Furthermore, the term crypto is related to cryptography. Its concept refers to a set of techniques that help protect information so that only the sender and receiver can understand it.
Through codes and protocols, information regarding cryptocurrency transactions cannot be accessed by third parties, which ensures more protection for the system.
What are the main cryptocurrencies available in the market?
Since the creation of bitcoin (BTC) in 2008, many other virtual currencies have emerged. At the end of 2022, these were the coins that had the highest market capitalization:
- litecoin (LTC);
- tether (USDT);
- USD coin (USDC);
- binance coin (BNB);
- binance USD (BUSD);
- ripple (XRP);
- cardano (ADA);
- solana (SOL).
How can cryptocurrencies be used as a means of payment?
So far, you have seen a lot of information about what cryptocurrencies are and how they work. Now, it’s worth knowing how to use cryptocurrencies as a means of payment .
So it is possible to consider these assets in your personal and private purchases, in addition to offering your customers a means of payment. In fact, this is an interesting trend that business owners should follow to keep their companies up to date with the market.
Therefore, know that there are different solutions related to cryptocurrencies to help companies use this means of payment. See the main ones!
Due to the strong growth of cryptocurrencies in recent years, many financial institutions are offering crypto cards to their customers. They function as points programs that generate rewards and benefits for users.
Through this type of card , it is possible to make payments with cryptocurrencies or receive prizes in cryptocurrencies. Each card and each company has its own rules and characteristics.
In addition to crypto cards, it is worth knowing that there are specific platforms that allow you to make payments with cryptocurrencies — or convert them into fiat currency. In this way, it is possible to make purchases or pay bills of the most diverse types without major difficulties.
Finally, it is worth mentioning that cryptocurrencies can also be used as a means of payment in the metaverse — another element that has recently emerged. This environment works as a kind of digital representation of the offline world.
Many companies already operate in the metaverse, allowing customers to transact on platforms related to this environment.
Throughout this article, you have seen what cryptocurrencies are, what they are for and what are the main digital currencies on the market. As these assets can be used as a means of payment, it is worth monitoring the trends to define whether it is worth including this possibility in your business.