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What is Cryptocurrency? Everything you need to know

 

Few technologies allow us to see things from different perspective. Cryptocurrency is of them. It has given a new horizon to online businesses.

The idea of cryptocurrency is enticing and confusing though. Most of the social media platforms are now discussing the value of the currency that is reliable, safe and frees you from government rules and transaction charges.

Cryptocurrency doesn’t involve any use of debit card and online banking. Many people believe in a myth cryptocurrency is not safe to use and vulnerable to fraudulent and cybercrimes. However, there is a list of companies and investors who are very well aware of the importance of this digital currency.

It is a virtual currency – you will see no one carrying this currency in their pockets. You can do normal shopping with Bitcoin as you do with the normal paper currency.

Everyone is interested whether to buy Cryptocurrency? Is it safe to use? And how much we should invest to get maximum benefit? Please read the full article as I’ll unfold each and everything one by one.

What is Bitcoin?

Bitcoin was the first ever cryptocurrency made by a Japanese mysterious internet user, Satoshi Nakamoto in 2009. Many attempts have been made to locate the inventor of Bitcoin but all in vain.

Bitcoin runs on a decentralized system called Blockchain. It is an online ledger system, which records all transactions, allowing all users in the system to update and store the given information. Bitcoins are generated by Bitcoin mining – A process which stores database, eventually creating datablocks, which consist of a complicated code and is run by many computers.

All computers involved in the cryptocurrency must keep running the datablocks in order to create more units. Datablocks create a decentralized Bitcoin wallet which can only be used if you buy Bitcoin.

Users who are involved in the whole process of generating cryptocurrency, earn by keeping the code running on their computers.

You don’t need to be haunted by this whole process of creating Bitcoin units, you can still buy and sell Bitcoin online without creating them by yourself.

Anonymous nature of Bitcoin:

The main benefit of this cryptocurrency is to make transactions secure and anonymous. It is very difficult to locate the actual owner of Bitcoin once the transaction is made. Anonymous nature of Bitcoin penetrates in digital market to achieve financial goals, hence it is mostly used by drug dealers and money laundering purpose.

The limit to create a total number of Bitcoin was already set by Satoshi Nakamoto, which was 21m. As of now, total 16m bitcoins have been created. Bitcoin now trades at $7067.90

General Economics’ principle of demand and supply, applies on cryptocurrency to maintain its flow in the market.  If more people are interested in the certain type of cryptocurrency, and it is limited in availability, its value increases.

Volatile in Nature:

People have seen the latest surge in the value of Bitcoin. However, the value of Bitcoin is highly volatile in nature. It turned many people into millionaires and left many out of pocket. So, we would recommend you to consult your financial advisor before investing in this digital currency. It is anticipated, the value of Bitcoin would reach to $500,000 in 2030.

Benefits:

One prospect of using digital currency is worth mentioning here – with the passage of time paper currency decreases in value when it is created more than its demand. Govt. needs to keep the balance in the chain of supply and demand. Because printing large number of paper currency won’t make people rich, instead it creates inflation in the market and decreases the money value. Bitcoin is free from this inflation process.

Unlike normal transactions, the transactions made by Bitcoin are irreversible. The code stored in Bitcoin is very complicated and consists of hexadecimal numbers which are near to impossible to decode, making this currency secure.

Comparison Between different Cryptocurrencies:

LiteCoin:

Litecoin comes with an incredible success rate in an online market. Most of the people consider it as a Bitcoin’s clone. Unlike Bitcoin complex algorithm, Litecoin is designed with a purpose of taking this crypto technology in the approach of a layman.

Litecoin consists of the different and easy algorithm and allows faster transactions.  Datablocks created in Litecoin’s algorithm update in a faster pace than Bitcoin, allowing transactions to be processed quickly.

Litecoin is the best alternative and easy payment solution for most of the investors, but the Bitcoin’s level of acceptance in an online market is way ahead than Litecoin.

Market Value: Litecoin currently trades at $50.7

Ethereum:   

 

Ethereum is another addition to the list of Blockchain technology. Some investors consider it as the best alternative to Bitcoin as it has made a renowned place in the cryptocurrency community after its inception in 2013.

Its main purpose is to increase the privacy and secure transactions, making it a good fit for investors who are looking for massive gains in the long run. The potential platform it provides is the ultimate cause of interest among people.

Market Value: It trades at $307 at the time of writing.

Ripple:

Ripple is an innovative cryptocurrency which is used as a medium to convert one currency into another. It comes with the same purpose of triggering fast transactions. However, most of the retailers don’t accept this mode of payment as Ripple runs a consensus system which can be compromised.

This system is not too authentic to secure the privacy of transactions. Whenever an illegal activity is reported in this system, it slows down the system quickly, trying to preserve the given information. Ripple comes with a token system for almost every currency.

Market Value: Its market value is $0.26

Dash:

 

An area where Dashcoin differs from other cryptocurrencies is its additional privacy feature it provides during transactions. Dashcoin comes with an increased anonymity feature and diversified functions.

It makes transactions totally anonymous by the advanced computers called Masternode, and updates transactions quickly, making it too confusing for someone to locate the actual users of these transactions.

Due to unavailability of ledger system, third parties cannot trace from where the transactions have been made, no matter how hard they try. Dash holds a massive interest in public and investors are looking forward to investing in this currency to get huge gains.

Market Value: Its market value $297.3

Monero:

Launched in 2014, Monero has successfully made its way to the leading cryptocurrencies of the present time. Its privacy is the main cause of concern for professionals and developers.

Most cryptocurrencies available in the market are public ledgers, however, the Blockchain in Monero is turbulent in nature. It lies ahead of its competitors because of its high-level privacy. You can also use this currency in exchange of other currencies in the digital market.

Market Value: Its market value is $87.6

Is it Worth Investing in Cryptocurrency?

We have seen people gaining lots of return on their capital by investing in cryptocurrency. The idea of investing in cryptocurrency is very daunting unless you are 100% you’ll get your money back with significant profit. Following are the few point you must consider before investing in this digital currency.

  • If you have enough courage to risk all of your money, then go for it.
  • Investing in cryptocurrency is same like starting a business. You need time to grow your business in the long run. Likewise, invest in cryptocurrency and forget your money for two years. It would take time to get some decent return on your investment.
  • Whenever any cryptocurrency drops in value, it always bounces back with the bang. But it doesn’t mean you should put all of your money in this field. You only have to risk enough money which you think, if lost, would give you no regret.
  • Before spending in this digital currency, you must get little knowledge how Blockchain technology works. There is no point of investing your money in a field you know nothing about.
  • Never ever believe on social media’s anticipation about cryptocurrency. On social media, people share what you want to hear, not actual facts.
  • There are around 900 coins are available in the market. Before investing, take one thing into consideration, always try to invest in the coin with a renowned brand name.Sometimes it happens, coins get abandoned one of two years after their launch.
  • Online presence always comes with some drawbacks as it is vulnerable to cyber crimes and online security. Do your proper research in order to keep your coins safe before investing in this digital currency.

Bottom Line:

Simply put, you cannot ignore the value of cryptocurrencies in the present age. Cryptocurrency has revitalized the online businesses.

However, Investors should keep in mind the investments made on cryptocurrencies can only be anticipated. Cryptocurrency always comes with some sort of uncertainty. It steadily fluctuates between high and low.

With the inception of this digital currency, many banks are highly concerned with the present value of Bitcoin and they fear this shifting of transactions business online.

Before investing in cryptocurrency, you must have a word with some financial advisers. Any prices, analysis, news, and research is only an anticipated data which is not 100% guaranteed.

 

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