For a few years here we started to hear about bitcoin, the first known cryptocurrency, but this is not the only one that is currently on the market, after bitcoin, many others began to emerge, such as the ethereum and the dash.

In the previous article titled the 10 most popular cryptocurrencies this 2019 already mentioned only 10 of the more than 1500 that currently exist. But, a doubt could appear: where do the cryptocoins come from? Given this overwhelming amount that currently exists and that seem to multiply almost daily, apparently the process is not complicated. Next, we will try to explain it a little step by step.

The history of bitcoin and how it became so important

In 2008, there was a global banking crisis, which forced financial companies to look for alternatives that would give users a solution to carry out their transactions in a natural way, even the most daring ones proposed the elimination of financial institutions. to a decentralized system.

This is how a group of developers begins to talk about cryptography for money and a new type of “digital money” based exclusively on cryptographic operations (hence the name cryptocurrency or cryptoactive, although cryptoactive encompasses other things apart from money, as contracts or digital properties).

Based on this technique, a whole technology that was called blockchain began to develop, which was the one that gave security and robustness to this new way of doing finance and business online. The central axis of all this? These are decentralized transactions, that is, they do not depend on any bank to approve or deny them, everything happens within the “blockchain ecosystem” that was created.

The ICO of cryptocurrencies what role do they play in this?

In the previous article titled What are the ICOs of cryptocurrencies? We already mentioned a bit, of what these initial offers (known as financing methods 3.0) are that are the ones that provide the capital in Fiat money so that the cryptocurrency or digital money can arise and start circulating.

An ICO is similar to the initial public offerings made in the stock exchange. In an initial public offering, shareholders buy securities that translate into shares of a company, while in an ICO investors buy tokens that are the “chips” of value of cryptocurrencies.

In what cryptocurrency to invest?

As we mentioned at the beginning, there are now more than 1,500 cryptocurrencies in the market and deciding which one to invest in (where to buy tokens) can be a bit complex, however, the decision will depend on the trust you have in the market Company in which you are investing.

A comparison that can be made in this sense is that when you buy tokens or “digital chips” it’s like when you went to the machine games room and bought chips to play: you buy the necessary ones and use them inside the room games that generate more confidence and if it is successful then your chips will have much more value.

Types of tokens in which you can invest

Going back to the example of the chips for video games or machine rooms it is good to clarify that there are basically two types of cards: service records and titles. Each one has a different functioning and also a different application and a way to obtain profits with them. Next, we explain each one of them.

Utility tokens

It is used in the goods and services of the company that created the cryptocurrency. Once again with the example of the engine room, it is as if you bought a series of chips that only work inside that room, they have value there and you can use them in any machine and even exchange them for others in the same room, but once you leave it they no longer have any value.

Security tokens

This is about a value like the one you would buy in an initial public offering from the stock exchange, but you do not get the participation that any other action implies. Then, it means that these chips are bought hoping that at some point they will have value, once the company develops the way in which users can make transactions with them.

If the development of the company is successful, there are more, and more transactions with that cryptocurrency, the demand will increase which means that it will also increase its value, thus, the initial investors, if they wish, will be able to sell their chips and obtain profits. However, it remains somewhat uncertain as long as this is not a concrete fact.

Can anyone invest in an ICO?

Technically, yes, it is public offerings. It only requires the capital and the necessary knowledge to be able to make the investment. So if it is among your plans to finance the emergence of a new cryptocurrency, you just need to agree with some developers, build on the blockchain technology, apply your own fork and then open an ICO to look for financing in the market and once you have it, you must begin to give value to that cryptocurrency trying to incorporate it into more financial operations.

What do you think about this topic? Did you know where cryptocurrencies come from and who pays for them?

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Image of WorldSpectrum via Pixabay.com under creative commons license.


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