How the cryptocurrency market works

For several years now, cryptocurrencies have been creating a space in the world and international trade. This increased with the arrival of the pandemic and the confinement measures caused by COVID-19.

Cryptocurrencies are digital currencies not controlled by the central banks of the countries and without the support of the banking systems. So they are not subject to inflationary processes that reduce purchasing power.

This digital money can be purchased online with an official currency (such as the dollar), through bank transfers or with the use of debit and credit cards, etc. It is required to create an account with a password on one of the digital platforms, which function as a wallet to pay, receive or sell them.

The cryptocurrency market is managed differently. According to the specialized site IG, the cryptocurrency market is a network of decentralized virtual currencies, which means that works through a peer-to-peer transaction system instead of using a central server. When cryptocurrencies are bought and sold, the transactions are added to the blockchain, which is a shared virtual ledger that records data, through a process known as mining.

El blockchain

Blockchain technology or chain of blocks originated in 2009. “It is a method of decentralization of transactions or secure transmission of data that gives users the opportunity to be in control of information movements without depending on a fixed intermediary,” he said. the computer engineer Alejandro Varas. The blockchain became known thanks to cryptocurrencies such as bitcoin, but in turn it was applied to other areas.

To operate with this digital money it is necessary to open a cryptocurrency portfolio and an account with a cryptocurrency exchange. (I)