Cryptocurrencies: What are they?
Cryptocurrencies are virtual currencies that use cryptography to ensure the security of transactions carried out over the Internet.
Basically, cryptography works like the serial numbers or signs used on banknotes to prevent counterfeiting, for example.
In the case of cryptocurrencies, these hidden signs are codes that are very difficult to crack. This is possible thanks to blockchain, a technology that works like a big ledger.
Multiple transactions and logs are recorded, spread across multiple computers. All transactions are blocked by cryptography, which guarantees the anonymity of those who carry them out.
Banks and financial institutions around the world, including the Central Bank of Spain and Latin American countries, have shown interest in using blockchain in interbank transfers, for example.
Despite having this differentiated technology, in practice, cryptocurrencies are used for the same purpose as any other.
This means that they buy both goods and services on the Internet. As they are not considered official currencies, they are not subject to market devaluation or inflation.
In addition, they are exchangeable for traditional -or official- money and vice versa...
