Cryptocurrency is booming today and bitcoin is making anyone who’s tech-savvy and knows how to trade in it, rich. But what really is the best cryptocurrency? What in the world is a blockchain? And how the heck are people making money electronically?

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All of these are excellent questions, we’ll be answering those and more in our article and along with guiding you through what bitcoin really is, we’ll be telling you where to invest as well. So, without further ado, let’s talk about the best cryptocurrency and bitcoin.

What is Bitcoin?

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Bitcoin is basically an electronic coin (worth hundreds of dollars at the moment) and does not exist in a physical state, meaning that exists only electronically and so it is a digital currency. Bitcoin is not owned by any government or any kind of authority and hence does not have any taxes imposed on it for its circulation, that also means that there isn’t any company that’s making more bitcoins, or investigating fraud in Bitcoins. All of these qualities of bitcoin contribute to its popularity.

If Bitcoin is Untrackable and Doesn’t Have an Authority Governing it, How Does it Have Any Value at All and How Does it Work?

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The answer is cryptography and because of cryptography, bitcoin is known as the first, best cryptocurrency. Basically, bitcoin is completely electronic and just like you exchange money by handing someone some cash, you can transfer bitcoins through a peer to peer network. This is exactly like sharing with someone a media file through peer to peer networks, it is basically as simple as that.

Why Can’t We Make Copies of Bitcoin and Produce as Many as We Want?

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First of all, because it’s not nice. But that’s not a good enough reason for you, is it? Bitcoin thought so too, that is why in the peer to peer network several computers keep a ledger (one of global magnitude) and observe the transactions that you’re making and know the total amount of bitcoins that exist, this ledger is called a blockchain.

Today the blockchain equals 100.18 GB.

Wait, You Just Said That Bitcoins Don’t Have a Governing Authority! Who’s Keeping The Ledgers Then?

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Aren’t you a smart cookie? But don’t worry, I stand by my statement, cryptocurrencies don’t have a governing body and the blockchain parties that keep these ledgers are users of the blockchain just like you are. To better understand these let’s take the example of a table of poker, lots of people are playing the game sitting around a round table, none of them brought any money with them so they decide to make a list of the score. It turns out that no one trusts anyone so they all make their own.

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In a case like this, if someone tries to cheat and increase their score, they can all simply compare their lists and make sure justice is done. The blockchain works similarly, only the roundtable is the globe and everyone who has a bitcoin wallet (or an account with a private key, we’ll get to that soon) is a player.

So basically, if you make a transaction, everyone gets to know about it and anyone who does update their blockchain recording your purchase or trade.

So, What are You Telling the Blockchain?

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You’re going to be announcing your account number, the account number of the person you’re sending your bitcoins to and how many bitcoins you are sending.

Is That a Problem? Should I be Worried About Bitcoin Security?

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Well, of course, you shouldn’t but I can guess that it’s a scary idea, because if all you need is a few account numbers to transfer bitcoins, someone might just steal them! It’s important to remember that Bitcoin is nothing like your average currency, it is the best cryptocurrency. This means that it uses cryptography, giving you a set of keys or unique mathematical signals that “sign” the transaction like you sign a check in order to make sure that no one is stealing money from you.

What are These Keys Again?

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Every bitcoin wallet has a set of unique keys, a private key, and a public key. The private key is used to sign these transactions and when the transaction is sent out to the blockchain, everyone can make sure that the signature from the private key checks out using the public key. This is a proof of identity and the unique private key cannot be replicated.

In Order for a Blockchain Computer to Add This Transaction on Its Computer, it Needs to Solve a Set of Mathematical Problems

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The blockchain has to be trusted and is maintained by computers that can solve specific mathematical problems, the fastest computer solves these mathematical problems first and gets to add the specific bitcoin transaction on to its entries. The blockchain then uses those specific computer entries and then moves on to the next transaction by basing them on the previously fastest computers blockchain entry.

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This is All well and Good But What’s This Blockchain Mining Everyone is Talking About?

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In order to understand bitcoin mining, let’s talk about our handy volunteer ledger keeping computers. Why in the world are they using so much of their internet and electricity? For the betterment of the world. Nope, not at all. They do it because bitcoin has an inbuilt system to reward them, the fastest computer that helps build the blockchain is rewarded 12.5 bitcoins that are created out of thin air. This process of getting bitcoins through working your computer on the blockchain is bitcoin mining. Alternatively, you can use automatic trading softwares like bitcoin loophole to get more money for your investment instead of mining.

Right, so What is The Best Cryptocurrency to Invest Your Money In?

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First of all, this is not financial advice but here are the companies that are going strong,

IOTA: One of the Best Cryptocurrency

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One of the best cryptocurrency is Iota. Iota’s idea is futuristic and deals with the machine to machine communication (M2M) meaning that different machines will be able to communicate with others to get tasks done faster and with more efficiency. An example of this can be your coffee machine ordering coffee on the internet every time it is empty (or something along the lines of this interaction). IOTA is open for business and investing in the best cryptocurrency might be a good idea.

Ripple: One of the Best Cryptocurrency

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Ripple is both, one of the best Cryptocurrency and a mode of payment transactions, only these will happen at the speed of light.

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Power Ledger: One of the Best Cryptocurrency

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This project aims at creating an intermediary free platform for energy trading. And its already working in Australia making it a good investment.

In Conclusion:

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Make sure the project you invest in is something you believe in and don’t jump into investment because someone says a company is going to be booming soon, make your own solid conclusions and read up on the company you want to invest in. Invest in the best cryptocurrency and take calculated risks. Let us know if you have any questions in the comments!

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Article by Born Realist