New oil, virtual Eldorado, money of the future, which is already expensive – these are the metaphors and comparisons to describe cryptocurrencies.
Over the past couple of years, the number of people who have made their first fortune in digital coins from virtually nothing has multiplied. No wonder that newcomers are also thinking how to get rich off of it. But they don’t know where to start. Whether it’s mining, investing, depositing crypto to a mobile online casino to hit a jackpot, trading, or creating, and selling NFTs, there are a dozen options.
What Is Cryptocurrency
Cryptocurrency is digital money that is based on software code – it’s calculated by a computer. Virtual payment systems with their own currencies, which are also called coins. All transactions in this system are protected by a cipher – a cryptographic method.
Blockchain is a colossal database of identifiers and checksums. A new approach, the essence of which is decentralization and general control.
The database is divided into blocks. Blocks have their own numbers (identifiers) and checksum, which prevents changes from being made without others seeing.
What is the purpose of this? The most popular answer is that money no longer depends on the authority of central banks and financial institutions. Just the math, which guarantees security.
Produce existing cryptocurrency by calculating the computer power of new blocks. In the past, the power of a home PC was enough to mine. Over time, it has become increasingly difficult to obtain new blocks.
Because each one is connected to the previous one, and that one is connected to another one, and so on. You need a lot of equipment to do the calculations. So now miners create farms – complexes with a large number of video cards.
Passive cryptocurrency mining. As we said, the equipment is expensive, and there is a shortage of powerful video cards on the market – all buy up miners. But someone is buying them and mining crypto! Farms need money for development, to pay for electricity. They accept investment. In return, they share the mined coins with you.
Creating Your Own Cryptocurrency
First, you need to decide what you plan to issue – coins or tokens. A token uses the blockchain technology of another coin and is faster to launch because the code is in the public domain. To issue a coin, you need to understand programming, to write the code.
NFT creations exist in a single copy and are therefore unique. Also, everyone can see who the owner is and this information cannot be changed. That’s why NFT works have gained value. Example: a motion designer drew an animation and sold it. Or Twitter founder Jack Dorsey sold his first tweet at auction for $2.9 million. The new owner became the owner of the post. What did it get him? Other than a sense of ownership, nothing. But collectors buy the original paintings by Dali and Malevich, and someone thinks you can look at them for free on the Internet.
The mechanics of NFT auctions can be more complicated than the bidding game in a classic auction. Each work can have its own buying algorithm. For example, selling a painting piece by piece, and in the end, the person who collected the most pieces of the mosaic will get it in its entirety. Although there are classic examples of auctions – whoever paid the most is the new owner.
This is a basic alternative to mining, mining crypto. The idea is that stakers keep the cryptocurrency in a wallet – locking it into an account. As if placing a deposit in a bank. Not all coins are suitable for stacking, but only those with the PoS algorithm – deciphered as “share proof mechanism”. These coins include EOS, BIT, ETH 2.0, Tezos, TRON, Cosmos, and others. When coins are blocked in the holder’s wallet, they help to mine new blocks and conduct transactions faster for other market participants. For this, the stacker gets his reward.