What is Cryptocurrency?
- What is Cryptocurrency ?, Cryptocurrency is a digital or virtual currency, that can be exchanged online for goods and services.
- The first cryptocurrency formed in 2009, which is the most popular bitcoin.
- cryptocurrency is not a physical currency it is a digital currency, and they safely secured in digital vaults.
- The most important feature is that
cryptocurrencies are not controlled and regulated by central authority or government,
They are practically immune to government interference.
What is blockchain technology in cryptocurrency?
- Cryptocurrency is a kind of digital asset and, distributed across a large number of computers.
- blockchain is the technology that enables the existence of cryptocurrency
for bitcoin blockchain technology was invented.
- Cryptocurrency can be traded and exchange just like physical currency but,
it uses digital encryption technology to control and verify the transfer of funds.
- This decentralized structure allows them to exist outside the control of governments and central authorities.
- Blockchain technology organizes and integrates transactional data which is very important for cryptocurrencies
Types of Cryptocurrency
- There are more than 5000 types of cryptocurrency available in the market.
- just like IPO (Initial public offering) in the stock market,
cryptocurrency raised money through ICO (Initial coin offering), which will list new cryptocurrencies in the market.
- the total value of all cryptocurrencies is more than $2 trillion.
- The most famous Cryptocurrencies are the following.
Popularity of Cryptocurrency
Cryptocurrency is mostly famous for Bitcoins, bitcoins were surges very unexpectedly over the years,
bitcoin price surged 408.8% per annum average.
Year Return [%]
These highly unexpected returns make bitcoins very famous among investors and media also.
Not only bitcoins, other cryptocurrencies like Ethereum also gave unexpected returns in only a few years,
which is following
bitcoin price surges from $327.58 in Oct 2015 to $56,224.1 in Apr 2021.
Ethereum price surges from $1.25 in Aug 2015 to $2201.65 in Apr 2021.
Cryptocurrency as an investment
- Cryptocurrencies are highly volatile and unstable.
- it may be a very good option for short-term investment but, still,
investors do not see them as a real investment.
- still, Bitcoins are the most preferable asset in recent times.
- cryptocurrency is not directly manipulated and control by central authority or government but still, its prices can be indirectly manipulated by social media tweets and posts, of highly influential people, like Elon musk, etc.
Advantages & Disadvantages of Cryptocurrency
1. it has the potential to give unexpected high returns.
2. Cryptocurrencies are immune from a central authority and, government manipulation.
3. Potential candidate for wealth-creating assets, it will make investors portfolio more diversified, other than gold and stocks.
4. there is only a limited supply of cryptocurrencies all over the world, there are only 21 million bitcoins that can be mined in total.
5. Transfer of cryptocurrencies are very secured and, one can access these currencies only through private key or public key, Blockchain is a highly safe and secured technology for cryptocurrency.
6. In Recent years many international companies like Tesla, Starbucks, etc are accepting cryptocurrency as a payment method.
1. Cryptocurrency is highly volatile and unstable.
2. since they are digital, there will be always chances of hacking and illegal activities.
3. also lack oversight and regulation, which may affect cryptocurrencies in the future.
1. how do I buy cryptocurrency?
Cryptocurrencies such as bitcoins are available for purchase only with U.S. dollars,
to store your currency you need an online “wallet”, which will be provided by many online trading applications.
“Coinbase” is one popular cryptocurrency trading exchange,
where you can create both a wallet and buy and sell Bitcoin and other cryptocurrencies.
2. is cryptocurrency legal?
Cryptocurrency is allowed in the USA, Canada, Germany, Holland, Japan, Norway, Singapore, South Korea, Switzerland, UK.
China, Russia, India, Nepal, Iceland, Bangladesh, Algeria, Morocco.
3. What are the most popular Cryptocurrencies?
7. Bitcoin cash