What do you know of CRYPTOCURRENCY?

Although many have made a huge profit investing in crypto, still there are more who doesn’t have any idea regarding crypto. The most popular crypto, “Bitcoin”, made its mark with the coming of Blockchain. People confuse Bitcoin and Blockchain is the same, but they are not. Below we shall discuss cryptocurrency meaning, is it a good investment, or a bad investment? its advantages and future scope.

What is a cryptocurrency? 

Cryptocurrency is a digital currency in which transactions are validated and records are kept by a decentralized system rather than a centralized authority utilizing cryptography.  

A cryptocurrency can be used to purchase goods and services. It enables safe online payments denominated in virtual "tokens," which are internally represented by ledger entries. A mast interest in these unregulated currencies is for-profit speculating, with speculators driving values high at times. Elliptical curve encryption, public-private key pairs, and hashing functions are examples of cryptographic algorithms and strategies that protect these entries. Although some cryptocurrencies have entered the physical world through credit cards or other schemes, most cryptocurrencies remain completely intangible.

    A cryptocurrency is a type of digital asset that is based on the mass distribution of networks over a significant number of computers. They exist outside of the control of governments and central authorities because of their decentralized structure. The term "cryptocurrency" comes from the encryption techniques used to keep the network safe. Many cryptocurrencies depend on blockchains, which are organizational mechanisms for preserving the integrity of transactional data. Blockchain and similar technology, according to many experts, will disrupt numerous industries, including finance and law.

Cryptocurrencies work using a technology called a Blockchain. Blockchain is a decentralized technology that handles and records transactions across numerous computers. The security of this technology is part of its attractiveness.

Are they a good investment?

    People who invest in crypto can be filthy rich at the same time they may also lose all their invested money? It is extremely profitable but also risky.

If you want direct exposure to the demand for digital money, cryptocurrency is an excellent investment, while stocks of firms with cryptocurrency exposure are safer but perhaps less rewarding alternative.

The value of crypto may go up and down but many investors see it just as speculation. Are you familiar with the theory “The greater fool”? Just as real money crypto cannot generate cash flow, for you to make a profit, someone needs to pay more for the currency than you did. That’s what’s called “the greater fool” theory of investment. In contrast, a well-managed business grows in value over time by increasing profitability and cash flow.

Advantages of cryptocurrency

    Cryptocurrencies have the potential to make it easier to move funds between two parties without the use of a trusted third party such as a bank or credit card provider. Instead, these transfers are protected using public and private keys, as well as other incentive systems like Proof of Work and Proof of Stake.

A user's "wallet," or account address, in modern cryptocurrency systems, has a public key, while the private key is only known by the owner and is used to sign transactions. Users can avoid the high fees charged by banks and financial institutions for wire transfers by completing fund transactions with minimal processing expenses.

Like many other online payment systems, crypto users can pay for their coins from anywhere they have Internet access. This means that customers will never have to go to a bank or a store to make a purchase. Personal information is not required to make any purchase, unlike online payments done using bank accounts or credit cards.

What does the future hold for crypto?

    For those who see cryptocurrencies such as bitcoin as the currency of the future, it should be noted that a currency needs stability.

As institutional money enters the market, several economists foresee a significant shift in crypto. Furthermore, there is a chance that crypto will be listed on the Nasdaq, which would provide legitimacy to blockchain and its usage as a substitute for traditional currencies. Some believe that all cryptocurrencies need is a validated exchange-traded fund (ETF). Although an ETF would make it easier for consumers to invest in crypto, there must still be a demand for cryptocurrency, which may not be generated automatically by a fund.

Some of the top cryptocurrency list

1.      Bitcoin

2.      Ethereum

3.      Tether

4.      Binance

5.      Cardano

6.      XRP

7.      Dogecoin

8.      USD coin

9.      Polkadot

10.    Uniswap

#Check out the risk involved in cryptocurrency trading

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