How Do Digital Money Transfers Work?

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How Do Digital Money Transfers Work?

For those who do not know or have never heard of them, virtual currencies / cryptocurrencies are simply digital money based on cryptographic protocols that are distributed and managed by their developers. In general, cryptocurrencies represent a new way to make money transfers in a virtual environment. Unlike conventional money, Crete Forex are not controlled by banking institutions or the government.

How cryptocurrency transfers work

In order to make a cryptocurrency transfer, first, you need a digital wallet, known as “Wallet”. This wallet can be installed on your computer or in your mobile device so that you can make transfers with crypto money.

These digital portfolios are controlled by software that generates encrypted codes — an address made up of numbers and letters to send and receive crypt-coins in translation. This address allows you to identify the public part of a pair of digital keys since the private part of the key is obvious only to the person receiving the digital currency.

Each transfer takes an average of 10 minutes and ends with the “mining” of crypto money. This can be done by “miners”, people with powerful computing equipment in which the system operates with an algorithm responsible for approving transfers. The result of this procedure is “hash”. “Hash” is a code that must be recognized by a network of cryptocurrency transfers. With each confirmed transfer, the commission was created for the miner, which allows the creation of new digital coins.

How to purchase cryptocurrency

Now, you have different ways to get virtual coins. You can, for example, purchase digital coins by purchasing them on the Internet market.

This purchase can be made directly with local currency on sites selling digital currency. Another way to acquire cryptocurrency is “mining”.

But, given that mining requires special equipment and more significant investments, it may not be the best solution to acquire virtual currencies, especially for those who have just entered the market.

Cryptocurrency as a solution for cross-border money transfer

Despite the fact that most of them are trying to offer a convenient interface, they are mainly focused on traders, not on those who want to exchange fiat currency for crypto, and then forget about it as soon as possible. In any case, when dealing with cryptocurrency transactions, you have to do a lot more manipulations than when transferring money from card to card.

Due to the relative complexity of working with bitcoins, many startups and companies began to develop solutions that could make the whole process easy, even for users with insufficient experience in the field of cryptocurrencies.

Solutions

There are quite a few solutions that attempt to facilitate remittances – both international and domestic. There are quite a few services, such as BitPesa or Bitwala, that offer instant money transfers. Such startups are mainly based on hiding cryptocurrency from users. The fiat currency of the user is anonymously transferred to BTC, transferred to another user, and then also anonymously transferred back to Fiat. For example, BitPesa exchanges bitcoins for local fiat currency with sending an asset to the user’s mobile phone account.

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.