What is Cryptocurrency?
Advanced Technology has upgraded the way people work, communicate, shop and even pay for goods. Nowadays, Companies and consumers do not always prefer cash anymore. This behaviour gives way to payment like Apple Pay and Google Pay that do not include human contact. With the speedy wave of a smartphone, customers can pay for items digitally. And now, a new payment system is coming forward known as cryptocurrency.
According to CoinMarketCap, there are more than 6,000+ different cryptocurrencies. Bitcoin and Ethereum are the most famous among them. Research has suggested that most people have heard of cryptocurrency but do not fully understand its meaning. So what do you mean by it? Is it safe, and how do you invest in it? To help, we will answer those questions.
The word “cryptocurrency” is obtained from the encryption techniques which are used to secure the network. A cryptocurrency is a form of virtual or a digital asset based on a network that is allocated across a large number of computers. This decentralised structure allows them to be outside the control of governments and central authorities.
Cryptocurrency is the latest stage in the evolution of money. It is used as a payment method to buy goods and services in the digital world, but many people invest in cryptocurrencies as they invest in other assets such as stocks and precious metals.
Cryptocurrency is a virtual asset designed to act as an exchange medium. Individual coin ownership data are stored in a ledger that exists in the form of a computerised database using strong encryption, secure transaction records, controlling the creation of additional coins, and verifying transfer ownership of coins.
Many companies issue their own currencies, often called tokens, which can mainly exchange for goods and services offered by the company. Think of them as slot machine tokens or casino chips. Cryptocurrency works with the help of a technology called a blockchain. Blockchain is a type of technology that manages and records transactions data. An essential part of this technology is its security, making it difficult or impossible to change, hack, or cheat the system.
Cryptocurrencies have always been designed to be tax-free from government manipulation and scrutiny. However, as they have become more popular, this fundamental aspect of the industry has become a trend. The currencies designed after Bitcoin are collectively called altcoins, and in some cases “shitcoins” and have often tried to come as modified or more secured versions of Bitcoin. Impressive features can be seen in these currencies that Bitcoin lacks, matching the level of security that Bitcoin’s networks achieve has largely yet to be seen by an altcoin.
These are the five largest trading cryptocurrencies by market capitalisation as tracked by CoinMarketCap.
Cryptocurrency Market Capitalisation
Bitcoin- $1.2 trillion
Ethereum – $263.4 billion
Binance Coin -$87 billion
XRP – $81.8 billion
Tether – $45.4 billion
updated on 14th April 2021
Cryptocurrencies attract their believers for many reasons. Here are three of the most popular:
- Believers see cryptocurrencies as the future currency and are hurrying to buy them now because they think they can become more valuable.
- Many believers like the fact that cryptocurrency succeeds in removing central banks from managing the money supply.
- Other believers like the technology running behind cryptocurrencies, the blockchain, because they believe it is more secured than traditional payment systems.
As we know, Investments are always risky, but few experts say that cryptocurrency is one of the more challenging investment choices. But trend says digital currencies are also some of the hottest commodities.
Cryptocurrency investment comes with a host of risks but also vast potential rewards. Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency and the projects or businesses they facilitate.