Understanding cryptocurrencies

Learn about Bitcoins, ripples and cryptocurrencies.


You may have noticed an entirely new breed of online marketing company beginning to appear – ones which build communications and sales between Bitcoin companies and their clients. They are catering to a rapid increase in entrepreneurs basing their business models entirely in the world of cryptocurrencies – virtual, or alternative money systems that only exist online.

Clearly companies operating in this virtual realm – commonly online gambling enterprises – need online marketing agencies to develop creative strategies to monetizing content to generate more cryptocurrency.111

But other digital marketing companies need to get up to speed too, as this form of money is increasingly legitimate beyond the keyboard.


Overview of cryptocurrency – and Bitcoins

The best known and most widely used version of cryptocurrency is Bitcoins, launched in 2008 (though Ripple is also becoming more recognised).

Cryptocurrencies don’t involve third parties but are a peer-to-peer form of payment. They rely on technology, software developed by enthusiasts. In the case of Bitcoins, the programmers who donate their time must secure approval for changes from lead developer Gavin Andresen.

Regulatory procedures are developed and “policed” by the communities who use them. People who arbitrate and record-keep are referred to as “miners”.

One of the biggest advantages of cryptocurrencies is the fact they are not subject to the same level of regulation and monitoring that hard currency is. It means sums can be exchanged with no outside measure and there is no way to “confiscate” digital earnings.

How to start using bitcoins

So how would you start to deal in Bitcoins, and buy and sell services online?

To begin, you create what is referred to as a “wallet”, an online Bitcoin account. There are various versions of this, depending on how much you want to trade in, and what level of security you feel is appropriate.

You would then purchase Bitcoins from specialist exchanges, or from other people who trade in them. You would use hard currency or credit and debit cards depending on what you were buying, from whom and in which country you are located.

It may sound very open, but it is controlled by the distribution database – in various parts of the globe – using Blockchain Technology. Once a transaction takes place, thanks to this and consensus in the peer-to-peer network, it creates an indelible record that can’t be altered or reversed. This also make it impossible to spend the same currency more than once.

Who’s using cryptocurrencies?

Not surprisingly, banks and other financial organisations are beginning to sit up and take notice. And some of the biggest names are beginning to accept Bitcoin payments – including Microsoft, Expedia and WordPress.

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