Cryptocurrency is a digital or virtual currency. it’s supposed to be used as a medium of exchange. With cryptocurrency, there is no use or Fiat currencies.
This currency is secured by cryptography, which means no one can ever fool around it. It’s based on blockchain. A decentralized database that is rude with all people participating.
You may have heard about Bitcoin or Ethereum, but there are more of them. since 2009, there have been so many projects.
The main thing that makes cryptocurrency so welcoming and so interesting for people worldwide is any Central Bank or authority issues them. It means no garment can alter or manipulate its functions.
Today there are more than 5000 different currencies in the world. It’s a new asset aura future. Before going in further and buying any cryptocurrency, you should know them much better.
Read on to understanding cryptocurrency once and for all.
What is cryptocurrency?
Mini how dreamed of creating a digital currency over time. People need a more secure way for their investment. The economic crisis in 2008 was an alarm. Everyone knew the end for fiat currency has come.
In the same year, an anonymous programmer whose identity is unknown to everyone creates a peer-to-peer electronic cash system.
He was Satoshi Nakamoto. Completely decentralizes the system. This system truly cuts any involvement from any central authority.
Everyone loved the idea; Because the problem of double-spending was out of the picture. Before the emergence of cryptocurrency it was normal to spend and a specific amount of money twice.
Because in a traditional system, the bank or central authority is the only one who kept records after balance and transactions. People do not have any control over their money.
But in cryptocurrency, people are the ones who control their money and watch everything Closely. Everyone has a role in this system. People to participate, and they can monitor everything.
Besides, all the data is available for everyone all around the world. So all the people in the network are able to see whatever is going on in the network. It is good to call cryptocurrency a child of democracy.
Here for the first time in the history of humankind, people do not blindly trust a system that hides everything from them. Now there is no matter of trust.
They do not need to trust a system or not to trust a system. as everything is clear as a crystal, the trust will come because there is nothing hidden from the common people.
As we have said earlier, cryptocurrency doesn’t limit to Bitcoin ton and Ethereum; there are so many other cryptocurrencies you can buy this day.
Types of Cryptocurrency
there are three big cryptocurrencies available. Bitcoin is the first cryptocurrency in the world, but after recording, many other blockchains were created.
These other blockchains are called altcoins, tokens, and DApps. Here we’re going to look at some of them.
what’s going on with the idea of Satoshi Nakamoto. That was revealed in 2008. It was the beginning of an enormous technology movement. Bitcoin does not have any physical form. It is digital.
As there is no bank or third-party to control it, each transaction happens between users or, as the Creator called peers. So they call it a peer to peer network. Bitcoin Is based on the blockchain.
Actually, without blockchain, Bitcoin would never exist. There is no third party, so you don’t have to identify yourself; you don’t have to reveal your identity.
No one knows who is doing a transaction. That anonymity’s priceless.
The privacy this system provides us with people is never seen before. All you know about the users is the public address. It’s something like an account number in a bank that’s you can give to everyone that wants to transfer some money into your account.
All people can see is a combination of numbers and characters that refers to you. In order to confirm a transaction, you need other users’ consensus.
Users or nodes will confirm transactions, and if they found anything wrong with a transaction, they do not confirm it simply. It has a limited supply and will end in 2140. that what makes it more valuable than any other asset.
Ethernium was introduced in 2015, and it was a technology does is called a smart contract. A smart contract executes all the conditions and transactions when certain things apply.
Bitcoin is the main elf Exchange, so it eliminates the need for a third party, but a smart contract eliminates the need for a third-party in lots of things. For example, they will need a third party to buy a house, sell the electricity, or sell a stock on the stock market.
You cannot put your home into a smart contract, so what should you do? You can use a token that represents your home. It is the best characteristic of Ethereum.
You can simply tokenize everything to put them on a blockchain. dApps, tokens, and Smart contracts are some of the functions of Ethereum. People who use Ethereum need Ether.
Ether is The currency of Ethereum. The speed of processing transactions in Ethereum is high. Despites bitcoin Ethereum does not have a limited supply. Its creation is never going to stop.
Tokens are really interesting; they are the third part of a cryptocurrency family, but they do not belong to a blockchain. These days there are so many decentralized applications.
We call them dApps. A decentralized application can be built on any blockchains such as Ethereum and NEO.
Tokens are the meaning of exchange in these criteria. by law can you can buy anything that’s available on a decentralized application. Nods confirm token transactions, so there is still a fee to pay for the users but users can always sell the token for a higher price.
In fact, some people buy tokens to sell them later; as we have said earlier that tokens represent a commodity. For example, it represents a home or a car, so it cannot be used to pay the fee.
To make a transaction in a decentralized application, you need some Ether or any other currency that belongs to the blockchain you are using to buy or sell tokens.
Repo is another black chain that favors banks that process transactions faster. So people call it the banker’s coin. Big companies trust in Ripple. There are many yet to participate in it.
If you cannot trust cryptocurrencies, the best choice for you is Ripple. Ripple works with governments. It is not decentralized.
It has been created as part of a fork in Bitcoin. So tits blockchain was a part of Bitcoin blockchain is the first cryptocurrency that uses the lightning network. With Lightning Network, the scalability of this currency increase.
It can process more transactions in a given time. So we can say that bitcoin is much faster and cheaper than Bitcoin.
Advantages and Disadvantages of Cryptocurrency
there are so many different disadvantages and advantages for cryptocurrencies that you may not be aware of. Here we will talk about some of its advantages and disadvantages.
Advantages of Cryptocurrency
You may have heard that cryptocurrency a great asset for investment. But you may not know the reason. It protects Your investments from inflation. Inflation is like a disease in currency.
Over time, there have been so many currencies that have lost their value. A currency should be back with something valuable. dollar is backed by gold, but there is nothing left of that gold.
Which coin has a limit? There is only 21 million Bitcoin to mine. So as the demands increase, the price goes higher and higher. So there will never be inflation in Bitcoin. some of its advantages or as below:
it is self-governed
It’s a completely decentralized currency. The governance and maintenance of this currency are in the hands of the users. All the transactions over stores in the hardware of the miners and Developers.
Taurus revolvers for minors that keep them motivated mining every block are the Bitcoin blockchain users need to pay fee confirms day transaction. As minors are getting paid, they continue to work and keep the Integrity of the crypto-currency.
Security and privacy
the privacy and the security of the blockchain are some of the most important things in the network. The history of the transaction or stored in the computer of all the people participating in the network.
So no one can ever change the data stored in a block or manipulate the system in any way because there are so many eyes in the network. All the Data are cryptographic. Besides, the identity of users is always hidden for everyone.
people can buy cryptocurrency using any sort of currency. We can blow by cryptocurrency using US dollar, European Euro British pound, Indian rupee, or Japanese Yen.
There are so many different cryptocurrency exchanges, so it is possible to convert one currency into a cryptocurrency.
if you have ever experienced sending money abroad, you may have hey a large fee. Actually, sending money across the world is an expensive Act.
You have to wait for so long and take a load amount of money to confirm your transaction. There are so many people involved in the process, and the third party is obliged to pay the amount required.
With the help of cryptocurrency, the transaction fees decreased so much. And there is no need for sale parties like any other payment system such as PayPal, or result in the extra transaction fee is eliminated.
Along with a High transaction fee, you should wait for so long to get your transactions on in a traditional system putting cryptocurrency no matter your transaction is international or domestic, everything is going to be gone in a matter of minutes.
Bitcoin, as the first cryptocurrency, takes the longest time to confirm a transaction. Even so, it is much faster than any other transitional system.
For Bitcoin, it takes about 10 minutes, but in a traditional system, it takes you days lab confirms your transaction.
Disadvantages of Cryptocurrency
Along with all the advantages They’re always some disadvantages in any system. Read along to understand some of the disadvantages of cryptocurrencies.
as we have said earlier, the privacy and security of cryptocurrency are one of a kind. It is so hard to track down any user with a wallet address, Even for the government.
The identity of users is Hidden, so in the past years, so many users who have used Bitcoin in illegal activity have used it to buy drugs on the dark web and Money laundering.
Lose your key and you lose your money
You are the only one responsible for holding your keys and wallet address. so if you happen to lost it, you should forget about your money; there’s no way to getting it back.
Decentralization at risk
The consequences are well known for being a decentralized system, but you should know that there are big companies in an organization involving in this criteria.
The amount of money they have invested in these currencies are huge, so they can manipulate the coin for a large swing in the price.
Not for all Fiat currencies
You can buy cryptocurrency using a lot of occurrences, but you cannot buy them with all coverages.
In some cases, you have to convert your fiat currency into the one that can be used to buy Bitcoin or any other cryptocurrencies. in doing so; an extra transaction fee will be added to the process.
Harm the environment
Mining cryptocurrency requires a lot of electricity. You can have mine Bitcoin or any other cryptocurrency currency using an ordinary computer.
You need to have Advanced Computers to do so. The competition in the mining criteria is so tense the cost is so high. So the major between minors is located in countries like.
Because in China, they use coal to produce electricity. That makes the environment polluted, and carbon footprints increase tremendously.
As we have said, cook Tacoma races are really secure when exchanges are not. Through the years, there have been so many exchanges that have been hacked.
Hackers transferred funds from thousands of accounts, and no one is responsible for that. So it is best to keep your cryptocurrencies in a cold wallet.
Besides, there is a possibility of a 51 hack. In that case, if the hacker can manage to control 51 percent of the network, they can manipulate the system as they please.
Criticism of Cryptocurrency
Over there are so many critics of cryptocurrency for many reasons. Some claim that it can be used for illegal activities. The exchange rate is volatile, so you cannot rely on the prices.
They will change in a matter of seconds. The reason is that the prices are based on supply and demands. So it is possible to see great increases ns drops in the price.
Besides, as we have said earlier, there have been so many exchanges that face hacks. Some people think bitcoin is a scam and it is a bubble that burst someday soon.
When did cryptocurrency start?
The cryptocurrency was first introduced in a 2018 white paper that was published by Satoshi Nakamoto in bitcoin.org. Nakamato refers to a person or a group of people.
The first block of the blockchain was mined on January 3rd, 2009. it was called black 0. the only information in the block is a title after Times newspaper. later that month, the first version of Bitcoin software was announced. And that was the beginning of the new era.
How to store cryptocurrency?
As you know, cryptocurrencies are not like any other color rinses; there is no physical form for them; you cannot store them in a bank account. Exchanges will offer you to store your cryptocurrencies.
In them, but there’s always the risk of being hacked in a crypto-currency Exchange. So maybe it’s better to find another way to store your cryptocurrencies.
Hot wallets are online wallets. They are Ron on Internet-connected devices like computers, phones, or any other devices. As these wallets connected to the internet, there’s always a risk of losing your money.
This is always easier to use this kind of wallet for transactions and access your asset.
Cold wallets are the safest option for storage your cryptocurrency. They are not connected to the internet. So the risk of compromise is much lower. The private key and all the information will be stored in this wallet.
Users can use software that works parallel with the cod wallet to see their assets without exposing their private key.
As it is an offline way to store your cryptocurrencies, you cannot make the transaction so quickly, so it would not be a good choice for a day trader.
The other option is a paper wallet; you can use a site that will generate a key for you. You can write that information down and keep it in a safe place.
Where to buy cryptocurrency?
There are so many exchanges in the world you can use to buy cryptocurrencies. read on to know some of the best crypto exchanges in the world.
It is one of the most interesting exchanges ever. You are looking for a place to trade safely; there are more than that in the Nominex.
You can trade, earn and win on this platform. You have never experienced entertainment along with trading before.
It is an easy exchange. An amateur will prefer it to other exchanges. The interface is so friendly. It is one of the most popular exchanges in the world, with more than t35 million users from over 100 countries.
eToro’s easy-to-use platform is fascinating. It let you test buying bitcoin or any other cryptocurrencies without spending your funds.
Robinhood is well known for its user-friendly interface and its low fees. There is no commission to pay for buying and selling assets. Besides, people find it really interesting and easy-to-use because it so much like stock trading.
How Does Cryptocurrency Work?
A cryptocurrency is a decentralized technology. This enables you to make sexual payments and a story or money without using any Middleman and without even exposing your real name.
All the data is a sword-on-earth database, something like a ledger called a black chain. It records every single detail of e each transaction, and it will be updated all the time.
Mining is a process to create PepsiCo races. In this process, you can use computer turn power to solve difficult problems. People can buy cryptocurrencies in exchanges from Brokers and store them in cold or hot wallets.
Cryptocurrency in applications of blockchain is Matthias fully discovered there is so much opportunity in the coming years.
How to Invest in Cryptocurrency
You should determine your budget for investments in cryptocurrency. You cannot go to a bank or even a brokerage firm to buy cryptocurrency.
Is not even that much except a bowl in the economy most financial institution do not offer this sort of services, so you should be careful about where you are going to buy the cryptocurrency and how to invest in this field. Consider the following before investing n cryptocurrencies.
Do not put all of your eggs in one basket.
Cryptocurrency is a volatile asset. Consider a small percentage of your portfolio to invest in cryptocurrency. Bitcoin is difficult to resist; you should be aware of greed and fear. It’s better to invest in cryptocurrencies.
Choose one cryptocurency
There something about 5000 cryptocurrencies on the market, so it hard to decide which one will be the best choice for you. The most popular one is bitcoin. But Ethereum, Ripple, and dash managed to attract more attention too.
So it is better to invest the greater part of your budget in this asset and then go for other options.
Choose an exchange
The next important thing to consider is choosing the right platform. Coinbase and Binance are one of the most well-known exchanges in the world.
If you are looking for a different exchange, you should try Nominex. Nominex is a platform for trading and having fun. You can trade and win and earn some reward at the same time.
So it definitely full of joy for those who know nothing about cryptocurrencies.
Choose a way to store your asset.
Let’s say you have decided what currency you want to buy, and you have chosen the exchange to do so, but where are you going to store them? You should think about a place safe.
There is a saying in the crypto world that says ‘no key, no money if you lose your key, you will lose everything. Be careful about what you chose as a store. Chose a hot wallet or cold wallet or a paper wallet to store your cryptocurrencies.
Should You Invest in Cryptocurrency?
Bitcoin and other cryptocurrencies attract so much attention. Financial institutions are using bitcoin and other cryptocurrencies as an investment. The acceptance and adoption of these assets have increased.
Today cryptocurrency plays a huge role in the economy. It gives you freedom and independence. Which cryptocurrency it is easier to buy, sell and even trade.
Besides the cryptocurrencies are still at the beginning of a long road, so the sooner you invest, the greater the reward will be.
How Can You Use Cryptocurrency?
These days due to the unexpected increase price of Bitcoin, people prefer to buy it as a means of investment. Actually, people try to buy cryptocurrency to increase the value of their assets.
The value of fiat currency is decreasing. People and institutions we’re looking for a safe haven for their investment, and they have come to cryptocurrencies.
But there are so many uses for cryptocurrencies. You should never forget that it was created as in the meaning of exchange. It was supposed to be used instead of money to buy products and pay for services and Tings like this.
South Dakota currency is increasing soon, the market will be stable, and at that time, the cryptocurrency will not be just a way to save your assets. It’s going to be going to act as it’s supposed to.
I may have said earlier the transaction fee for cryptocurrency transactions are incredibly low. Soon there will be so many markets that Use these currencies for payments.
The more stable the market will be, the more company, and the store will accept that because no one likes to pay higher fees.
What are cryptocurrency simple words?
To put it really simply, you should say that cryptocurrency is a type of currency in which people use digital files as money. These files were created using the same method in cryptography.
The most important thing you should remember is that cryptocurrency is decentralized, which means that no one controls the system. It is the most transparent and clear system humankind has ever used.
Only information is accessible through the blockchain, and no one can change that.
Why is the cryptocurrency used?
Investors all around the world retired from using a disaster system named bank. They write in an international phase did not have a chance to save much more money because the transaction fees in a traditional money system are insanely High.
Investors have refused to pay for daily needs order yours because the transaction fees cost too much. Besides, did you don’t want to wait so long for a single transaction to be confirmed.
The economy is a competition. The one who acts sooner will win a greater reward. On the other hand, there is a much greater problem with the traditional system of double-pending.
In fact, it is possible to spend the same amount of money in the traditional system twice. Cryptocurrency common problem that’s been bothering investors for so long. Besides, currencies like the dollar are not backed with anything.
The amount of dollars in circulation is much higher than its counterparts gold in a safe of a US government. That’s the cause free economy crisis in 2008. So cryptocurrency comes into the picture to solve a big problem.
In the end
Cryptocurrency is a whole new idea for humankind. It’s been offered to solve a common problem in the economy. We needed to have a solution to have an alternative for Fiat currencies.
Now we have cryptocurrencies. If you’re looking for assets that are valuable in their nature, you should go for cryptocurrencies.