Cryptocurrency – easily explained

Cryptocurrency can seem very advanced and difficult to get acquainted with, especially if you have no previous experience with it. Many people are unsure of how cryptocurrency works, and what it is at all.

In this guide we will give you a simple explanation of what cryptocurrency is. We hope this gives you a better understanding of the digital currency.

What is cryptocurrency, simply explained?

Cryptocurrency is simply explained digital currency that is not controlled by national or international authorities or central banks. It is often said that the currency is “decentralized”, since control over it is not centralized by any party.

The control over the transactions is rather distributed over the network, in that all transactions are stored in blocks in a block chain. A network of computers or “nodes” verifies that the transactions are correct.

In a blockchain, which can actually be considered a digital, distributed accounting book, new blocks will be generated on a regular basis. Each block contains information about the most recent transactions, and can also be linked to previous blocks. Thus a chain is formed.

If you think this seems a bit complicated, there is no reason to despair. You do not have to fully understand the process behind it. You can still use and enjoy cryptocurrency.

Why buy cryptocurrency?

You now know a little more about what cryptocurrency is. But why use cryptocurrency when you have traditional currency? There are several reasons why more than 200,000 Norwegians today own cryptocurrency . Here are some of the benefits of crypto compared to “regular” currency:

• Fast transfers – also across different countries
• Greater degree of privacy and anonymity
• Low fees for transfers

However, many of those who have bought cryptocurrency have not bought it to have a fast, cheap and secure means of payment. Many people invest in cryptocurrencies, much like some people invest in stocks.

If you buy cryptocurrency today, rising prices can mean that the currency is worth far more when you sell it in the future. This is of course risky, since cryptocurrency can fluctuate very quickly in value.

Where can I get cryptocurrency?

There are different ways to get cryptocurrency. Perhaps the easiest and fastest method is to buy cryptocurrency through a cryptocurrency exchange. A crypto exchange is a website that offers buying and selling cryptocurrencies, but also storage (in digital wallet) and exchange.

There are many different crypto exchanges that can be checked out. It is a good idea to go for a crypto exchange that has registered with Finanstilsynet, so that everything is in order. Here are some registered cryptocurrencies you can buy cryptocurrencies from:

• Firi (until recently called MiraiEx)
• [eafl id=”2945″ name=”Etoro” text=”eToro”]
• Norwegian Block Exchange

[etoro]

Another way to obtain cryptocurrency is through mining. This is a little more advanced, and involves extracting cryptocurrency through your own computer. To be able to do this, you need, among other things, a high-performance graphics card or a mining rig.

The best graphics cards for cryptocurrency mining

• Nvidia RTX 3090
• Nvidia RTX 3080
• AMD RX 6900 XT
• Nvidia RTX 3070

When you extract cryptocurrency, you verify transactions, and are then rewarded with cryptocurrency. If you have a good graphics card, you can quickly earn around 100 kroner in crypto daily. Remember, however, that the process requires a lot of power, so the total gain will not be so great.

What controls the value of cryptocurrency?

You have now received information about cryptocurrency easily explained, but what really controls the value of the digital currency? It is mainly the degree of supply and demand that determines the value.

With high demand and low supply, prices will rise, and otherwise the value will fall. Cryptocurrency is known to have high volatility, ie a course with potentially large and unpredictable fluctuations.

The value can, among other things, be affected by coverage in social media and the press, financial crises in individual countries and other factors. All this can have an impact on the demand for cryptocurrency, and thus the value.

If you want a cryptocurrency that has a more stable value, stack coins can be a good idea. Stable coins such as Tether have a stable value that reflects the value of, for example, US dollars or commodities.

Where can I find an overview of cryptocurrency exchange rates?

On sites like eToro and Firi, you can stay up to date at any time on the exchange rates for the various cryptocurrencies, such as Ethereum or Bitcoin.

You can look at graphs that show how cryptocurrency changes in value from day to day. By looking at the prices before you trade cryptocurrency, you can more easily decide whether it is smart to buy or not. It can often pay to buy crypto when the value is low, and sell when it is high.

[etoro]

 

Different types of cryptocurrencies

Simply explained, there are many different types of cryptocurrencies. For many, Bitcoin is probably the most famous of them all, and this was also the cryptocurrency that was first launched.

Since Bitcoin came on the market in 2009, many alternative cryptocurrencies have also been launched – also known as altcoins (alternative coins). Examples of altcoins are Ethereum and Dogecoin.

Which cryptocurrency is best to buy depends, of course, on the exchange rate at the time of purchase. Feel free to copy those who know crypto-trading, through what is called copy trading. So you do not have to be a crypto expert yourself.

Do you want to trade cryptocurrency?

We have now told you the most basics about cryptocurrency, simply explained. As you may understand, the very technology behind cryptocurrency is quite advanced. However, it does not have to be difficult to get started with cryptocurrency purchases though.

You can easily buy cryptocurrencies like Bitcoin from eToro or other crypto exchanges, and you can even copy other users’ actions. It is also possible to extract cryptocurrency yourself, if you have the tools to do so.

If you are going to buy cryptocurrency to invest in it, it is good to be aware of the risk of this. Crypto can fluctuate a lot in value, and is very volatile, unless you choose stable value stack coins. Good luck!

FAQ

[sc_fs_multi_faq headline-0=”h2″ question-0=”Hva er blokkjeder, enkelt forklart?” answer-0=”Blokkjeder kan beskrives som distribuerte regnskapsbøker som er desentraliserte. Dette betyr at regnskapsboken ikke kontrolleres av banker, men av de i nettverket.” image-0=”” headline-1=”h2″ question-1=”Hvor er det best å kjøpe kryptovaluta?” answer-1=”Kryptovaluta er best å kjøpe hos en kryptobørs som er registrert i registeret til Finanstilsynet – som for eksempel eToro eller Norwegian Block Exchange.” image-1=”” headline-2=”h2″ question-2=”Hvorfor heter det «kryptovaluta»?” answer-2=”Kryptovaluta er slått sammen av «krypto» som henviser til krypteringsteknologien, og «valuta».” image-2=”” count=”3″ html=”true” css_class=””]