What Is Cryptocurrency?
Cryptocurrency is a system of digital currency that is decentralized and does not depend upon any central authority like a government or any organization.
It concerns the totality of intangible and virtual transactions.
Cryptocurrency is a system in which algorithm encryptions are applied to secure a network.
This network is secured by a method called cryptography, that assures it, to not be imitated.
These organizational components of the security of transactional data and its integrity are called blockchains. And some special sort of virtual tokens is also dedicated to online payments.
In short, we can say that cryptocurrency is the new system of payment, that is completely digital and very suitable for today’s modern world.
How Does The Cryptocurrency Emerged?
A kind of digital coin was created for the first time in history named “bitcoins”.
One more decade before that, many attempts were taken to create the online currencies with encryption securities–that resulted in some undeveloped digital currencies, are B-money and Bit Gold.
In the year of 2008, a peer-to-peer Electronic Cash System in the name of Bitcoins was introduced by a non-real identity –Satoshi Nakamoto.
In 2009, Bitcoin software was created to record and verify transactions. Through this software, new bitcoins were created and they became accessible to the public.
After a year, bitcoins were sold for the first time.
And then in 2011, two more kinds of encrypted currencies were created are “Namecoin” and “Litcoin”. These currencies proved to be more beneficial as compared to bitcoins.
And now, more than a thousand cryptocurrencies are present.
After 2012; the years 2013 and 2014 sustained to be the most drooping years for cryptocurrencies.
In 2013, the prices of bitcoins suddenly begin to decrease from $1,000 to $300.
Then in 2014, one of the biggest bitcoin exchange platforms– mt. Gox got scammed of about 850,000 bitcoins, that the owners could never get back.
The hands behind this theft are unable to expose till today!!!
Despite this downfall of cryptocurrencies/bitcoins, it still has an enormous amount of significance due to the way it makes money.
How Does The Cryptocurrency Make Money?
There are two ways to make money through cryptocurrency–one is very simple, by selling your bitcoins at profit; whereas, other is very complex, that is mining the bitcoins!!!
But, first of all, you have to invest in it.
For that, you need to purchase cryptocurrency.
There are different crypto-exchange applications present that allow you to purchase cryptocurrency– Cash App, Coinbase, etc.
Once you did invest in it, either you can sell it, or earn new coins by being a bitcoin miner.
Now, another question arises there that, what is Bitcoin Mining?
Bitcon Mining means earning new bitcoins as a reward after completing verification of a block.
Blocks are the verified transactions that are added to the blockchains.
1 block is equal to 1 MB verified transactions.
Miners help the cryptocurrency system to avoid the double-spending problem. Because when transactions are verified, the coins that are used can not be re-used.
But not every miner can win the reward. Only the one who provides the right/closest answer first wins the reward. This in terms of cryptocurrency is known as Proof of Work (PoW).
And for providing PoW, you require to have a very sophisticated computer, and a great numerical solving ability.
How Does Bitcoin Works?
For bitcoins, it isn’t the same way as cash.
Your transactions are saved and everyone can see your encrypted coins. But, the only owner can decrypt them, no one else can.
The Owner possesses a private key to decrypt their coins.
But these coins/currencies are not valid for banks. Only some particular entities accept them. This is why they retain their kind of called Digital Wallet.
These digital wallets are also called crypto wallets.
It is an electronic device that furnishes assistance to online transactions.
You can purchase anything and make payments by using these wallets. Isn’t that amazing?
One of the popular types of crypto-wallets is bitcoin wallets. However, there are many more types.
Not only the types of wallets but, cryptocurrency also has types of its own.
Nowadays, more than 1,000s of types of cryptocurrency/digital coins are present. But 3 most popular types are :
- Bitcoins (certainly)
- Altcoins &
Each of them has its pros & cons and facilities & limitations. Because each digital coin has a value of its own. You just have to decide that which one suits you the most.
But after all these assuring facilities, people still have some suspicions about the safety and security of cryptocurrency.
So here I’m gonna wipe out all those doubts and questions that are roaming in your mind, by explaining the next section of my article.
Is Investing In Cryptocurrency Safe?
Cryptocurrencies contain the procession of cryptography. Due to this factor, cryptocurrency is recognized to be incredibly great in terms of safety and security.
Cryptography ensures not to have any Go-Betweens while the transactions are taking place.
And then the private keys that are provided to every owner for their encrypted coins are the very special part of its safety and security.
No, another person can decrypt the coins other than the one who knows the private key code.
That means, your money is certainly safe in your digital wallets and no one can steal it in any way.
Why cryptocurrency is always criticized?
Now you might be thinking that if cryptocurrency was that useful and beneficial, then why it is criticized always? Is it like that?
Well, if this is the question, then your question is 100% accurate.
Yes, it does happen!! Cryptocurrency is frequently criticized in the economic world and the market hub.
It is due to the ups & downs that occur in the digital currencies due to the market prices that alternates its ranking on stimulation of its supply and demand.
The prices of digital coins may plunge to decrease abruptly anytime depending on the reduction of the market’s demand for them.
Secondly, the great security of cryptography, cryptocurrency still bears the risk of being hacked.
That means you have to keep in mind that you may have to confront loss if you are investing in cryptocurrency.
Yes, it is possible !!!
There will be no misgiving to say that cryptocurrency is a great idea of digital money in this digital world of nowadays. It is profitable, diverse, comfortable, and so on.
Yes, some drawbacks of cryptocurrency are also there.
But few drawbacks can not take away the privilege and usefulness of cryptocurrency.
Every technology in this world has some flaws, there is no technology present in the world that only & only gives benefit.
In the end, I would advise you to always take advice from your instinct. Instinct is the fairest advisor.
Ask from your instinct that, either it will be beneficial/suitable for you or not!!!
All the pros & cons are in front of you in this article above. Now it’s up to you!!
Whether are you want to invest in cryptocurrency or not???
So what’s your opinion? Thank you!
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