What Is Cryptocurrency. How it works?

You must have heard a lot about Cryptocurrency, but most of you will hardly know about it. You probably know that it is a virtual currency, but how it works or information related to it you may not have. In this post, we are going to tell you everything about Cryptocurrency i.e what is Cryptocurrency and how it works. We will be also telling you the best Cryptocurrency to invest.

Since ancient times, people have traded physical assets for goods. That is the exchange of goods in exchange for goods. Later, those currencies were mostly printed bills or coins, which are today operated by an authority like the government of a country and a financial institution like RBI tracks it. In today’s time, virtual and digital currencies are the most prominent medium for transaction, purchasing, etc. Let’s know what is Cryptocurrency?

What is Cryptocurrency?

A cryptocurrency is a digital currency. This currency is created using an encrypted technology that is used to regulate the unit of currency.

Transparency in cryptocurrency transactions is done with the help of encrypting.

In today’s time, people use online money in many things like online net banking online shopping where they use their bank account credit card or debit card.

In such a situation, if they want to do money transactions, then it is necessary to deposit money in their account, that’s why cryptocurrency has become the most famous in today’s time because cryptocurrency itself is a completely digital currency for which you just have to buy it. And with the help of that currency, you can do any digital transaction.

Today, there are many cryptocurrencies in the market such as bitcoin, libra, ethereum, etc. There are many types of cryptocurrencies are available in India too like GeoCoin.

What are the some best Cryptocurrency 

There are many types of cryptocurrencies in the market today, but only a few of them have got the medal of credible currency which are very popular in today’s time and are also performing well, so we will let you know about those cryptocurrencies below.

1. Bitcoin

2. LiteCoin

3. Peercoin

4. Ethereum

5. Dogecoin

Bitcoin

Historically, bitcoin is the first cryptocurrency to become operational in 2009. How does bitcoin work? It is completely based on blockchain technology. As its name suggests, blockchain is a series of data blocks, each of which contains buyers’ and sellers’ data as well as details of each transaction. When a certain number of transactions have taken place, they are grouped together into a block that is added to the chain. This guarantees total transparency and proper execution of transactions.

Bitcoin is the oldest cryptocurrency. It is therefore not surprising that it is also the most advanced – in the form of a complete posture or by evaluation. Bitcoin has not stopped attracting attention in recent times, especially thanks to its high valuations, which have followed each other consistently in 2017.

Bitcoin is the first cryptocurrency to be created in cryptocurrency, which was created in 2009 by a person named Santoshi Naka Moto. This currency is a decentralized currency that you can use online because no government of any country has control over bitcoin.

LiteCoin

LiteCoin was created in October 2011 by Charles Lee, a former Google employee. Since then, LiteCoin has quickly established itself as the fourth number of cryptocurrency in terms of capitalization. Since early December 2017, LiteCoin prices have remained above $ 300 per unit.

When Mr. Lee created LiteCoin, he voluntarily chose to modify the code of bitcoin, while keeping it as a working basis. Its goal was to create a cryptocurrency that is more efficient than what is already in circulation. However, he wanted to use LiteCoin Wallet to simplify and secure the transparency of transactions as well as the security provided by blockchain technology.
Light Coin is also a cryptocurrency which, like bitcoin, is a decentralized cryptocurrency that is not controlled by the government of any country.

It was created in 2011 by a person named Charlie Lee. He also contributed to making Bitcoin a success, after which he created LiteCoin. LiteCoin works faster than Bitcoin and that is why Litecoin is also very popular among people like Bitcoin.

What is Cryptocurrency
What is Cryptocurrency

PeerCoin

PeerCoin is also a decentralized cryptocurrency, but there is no control of any government authority over it, and PeerCoin works just like bitcoin and its technology is very similar to cryptocurrency. It is also similar to Bitcoin and this is the reason why people like PeerCoin like Bitcoin too.

Ethereum

Ethereum is a cryptocurrency that has gained the most fame after bitcoin. It is a currency built on the technology of cryptocurrency decentralized blockchain.

Ethereum cryptocurrency has become so famous after bitcoin that in today’s time people prefer to use Ethereum currency more than bitcoin.

DogeCoin

There is a very interesting story behind the making of the DogeCoin. At the time when bitcoin was the most famous in the world of cryptocurrency and its name was going on everyone’s mouth, a person named Cat Mark created a currency named DogeCoin. Seeing the fame, DogeCoin was made a currency that uses the technology of encryption like LiteCoin and today Dogecoin is used like Bitcoin.

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How does Cryptocurrency work?

Transaction of this currency is done using peer-to-peer technology which means the transfer of currency directly from one computer to another.

The currency is sent to the people like a blockchain and it works in the same way that the bank keeps track of all its transactions, in the same way, that currencies also keep track of all transactions of transactions.

Thousands of Bitcoin Minors around the world keep a close eye on the transactions of Bitcoin transactions and explain the mathematics of their transactions. Such people are called Minors of Bitcoin and due to these, Bitcoin is the most secure currency in today’s time.

People mining bitcoin are like the color of the bank in the same way that the clerk of the bank calculates the transactions from the bank account, in the same way, that the people mining bitcoin calculates the transaction of bitcoin in the court language. There are 12.5 bitcoins given to a person mining bitcoins on such a successful transaction.   

Importance of Cryptocurrency trading

If cryptocurrencies have gained so much popularity in very little time, then there would be something. Cryptocurrency trading has become one of the major sources for earning in today’s global market. Let’s prove it with an example,

In addition, in recent months, many cryptocurrencies have seen an explosion in their valuations. For example, an investor should be able to make a profit of around 2,000% in December 2017 for only one year by purchasing Bitcoin CFD in January 2017.

At the same time, given the fact that the cryptocurrency market is very volatile, it can also cause significant losses for the merchant.

However, while it is tempted to invest in cryptocurrencies through physical investment, it is still more attractive to trade them through CFDs.

The cryptocurrency market is particularly volatile, varying by several percentage points to look at daily prices, upwards, or downwards.

In such a volatile context, going through CFD makes it possible to buy and / or sell orders that can be executed in less than a second.

To close a current state is done just as quickly while buying or selling physical cryptocurrencies takes time to register and processing time.

Is it legal in India?

The question of whether the currency is legal in India is in every person’s mind, then the answer to this question is that cryptocurrency is a currency that is a decentralized digital currency.

No government of any country has any control over this currency, for this reason, the Government of India has neither banned it nor does it prevent you from buying it.

So if you want, you can buy any currency, but at your own risk, the Government of India says that it is a currency that no government has control over.

So if you invest in such currency and if you incur any loss then it will not be their responsibility, so if you want to invest in cryptocurrency then you can do it according to your understanding and your desire.

Merits of Cryptocurrency
  • There is very little chance of fraud in cryptocurrency.
  • Cryptocurrency is more secure than normal digital payments.
  • In this, transfer charges are also very low.  In this, the transaction fee is much less than your credit card, so it is used the most.
  • There are very few chances of hacking your account because a special type of security is used in it.
  • A currency is a digital currency that you can use in any country.
  • The price of the currency is equal in all countries because no government of any country has the right to it.
  • Cryptocurrency is a very secure digital currency, so you can use it anywhere in which you do not worry about being fraudulent online.
  • The stalled cryptocurrency is not the currency of any country, so it does not affect the economic situation of any country.

De-Merits of Cryptocurrency

  • The biggest disadvantage of cryptocurrency is that if you make a payment to someone once or a payment is made by mistake, you cannot even reverse that payment.
  • If your Wallet ID is lost or the company blocks your Wallet then you cannot complain about it.
  • Cryptocurrency is a digital currency and the government of any country does not have any control over it, so its price may fall much higher and you can bear loss instead of profit.
  • A crypto-currency is a currency that is used between 2 people, for this reason, any wrong type of actions can be done by using this currency such as cryptocurrency used to buy weapons or to buy drugs.
  • The use of currency in this purchasing is one of the reasons why the government of all countries forbids every citizen from buying currency.
  • The biggest problem of currency is that if your cryptocurrency account is hacked once, then you cannot get your cryptocurrency back because if someone hacked your currency account and transacted it, you will get nothing besides regret.

Future of Cryptocurrency

We all are now well aware of the usage of Cryptocurrency and experts have presumption that Cryptocurrency is going to boom in the upcoming few years.

Bitcoin as a part of Cryptocurrency is currently used in 96 countries and has 12,000 transactions per hour.

If you are interested in it, then the first step is to collect as much information about cryptocurrency and then try it second.

Buy cryptocurrency in small quantities through an exchange, try and do some transactions with it. When you become comfortable in it, then think about investing in it.

THANK YOU FOR READING>>What Is Cryptocurrency

About the Cashnomic author

Rishabh Shrivastava is a Banker by profession and a tech graduate with a couple of years in Banking and he also holds a good knowledge of investments.

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