Investing in Cryptocurrencies – A Primer

A Cryptocurrency, as defined by Wikipedia, is “a digital currency that functions with no physical commodity.” A more accurate definition is “an electronic currency that is not controlled by a central body.” A decentralized system, which is to say a Cryptocurrency system, is one in which Cryptocurrency units are issued without the intervention of a centralized organization. A decentralized system is one that relies on peer-to-peer technology for its integrity and transferability. A proof of maturity for this type of Cryptocurrency system is the ability to distribute and execute the issuance of these units without having any major third party involved.


A number of different kinds of Cryptocurrencies are available, including Peer-to-peer (P2P) programs, personal computers, digital certificates, and paperless (no paper currency) systems. A Peer-to-peer Cryptocurrency system operates using the Internet. It may be an online computer network, a file transfer protocol (FTP), or a browser. In a P2P Cryptocurrency system, a computer is used to maintain the cryptographic keys that make up a particular Cryptocurrency. A digital certificate is issued by a digital certificate authority (DCA), which is also used to prove ownership of the digital certificate.

An alternative to Cryptocurrency mining, Proof of Stake Mining, is available to anyone who wishes to attempt to mine Cryptocurrencies but does not have sufficient resources to properly do so. Proof of Stake Mining is designed for those who have a limited amount of capital to purchase a large block of Cryptocurrencies. With proof of stake, a person is only required to stake a small portion of the digital currency that they desire to acquire. The smaller portion will be owned by the person’sether.

Because proof of stakes require a minimal amount of resources, it can be combined with other methods of securing cryptosurface such as Digital Signature and Secure Shell. Digital signatures and secure shells work together in that a user can verify transactions with the private key that is contained in the messaging application. This provides users with an additional layer of security that makes it impossible for a third party to access any of the private keys.

There are various methods that an investor can use to earn revenue from their Cryptocurrencies. One way is through creating new blocks of Cryptocurrencies that are generated by the proof of stake methodology. Another method is through contracting with other investors that also wish to sell their tokens and create new blocks of Cryptocurrencies that are generated in this manner. Lastly, an investor can participate in trading at live exchanges. The types of exchanges vary by type of Cryptocurrency.

Prices for each of these methods of earning revenue vary. For instance, the price of Proof of Stake Mining varies with the processing power of the miner that is conducting the mining process. In addition, prices may also fluctuate based on the processing power of the virtual machine that the transaction is being conducted through. On the other hand, the most profitable way to earn profits is through Investing in Cryptocurrencies. Through this method, an investor can acquire significant profits without having to exert any effort whatsoever.