Technology has taken over and has changed everything and every method. From the way, people communicate to the way people shop. In this era of technology, the method of paying has also upgraded drastically as most of the companies no more prefer cash and promote contactless payment methods. These days every person owns a smartphone and due to multiple features and options available, prefers to pay from it, A new payment method is introduced known as cryptocurrency. Now you must be wondering what is Cryptocurrency actually and how it works.
What Is Cryptocurrency?
Cryptocurrency is a combination of crypto and currency. Crypto word is used for the technology-driven technique in which the network is kept secure. Cryptocurrency is basically a virtual currency, completely secured by cryptography. You may call it a digital asset. Cryptography works to make the currency protected from double-spend or counterfeit. Cryptocurrencies work on blockchain technology, which ensures the safety of transactions and transactional data.
Furthermore, the best thing about cryptocurrency is that it is free from the interference of government as it is not issued by any general authority. In simple words, it is a form of online currency which you can use for buying goods or services online.
Kinds of cryptocurrency:
According to coinmarketcap.com, different cryptocurrencies may be above 10,000, are present and are being traded publically. Crypto currencies multiply by coin offering ICOS. The first cryptocurrency being introduced in 2009 was Bitcoin which became a hit then; many similar ones came into the market. The total worth of bitcoin to date is $740 billion. Some other competitor’s currencies offering similar features are Lit coins, Altcoins, Ethereum, Namecoins, Polkadot, uni swap, USD coin etc.
Good investment or not
It is true that cryptocurrency goes up in terms of value but most investors think of it like some speculations. Also, it is because that cryptocurrency doesn’t yield a flow of cash. It is because crypto does not seem to be a stable currency. Although transferring money anonymously could be done by it effectively.
- Transferring funds is quite easy through cryptocurrency.
- There is no interference of the third party in transferring procedures such as banks or govt.
- Transferring is kept secured through incentive systems.
- The wallet is treated as an account (public key) and the private key is known by the user only.
- Transferring of funds is done by charging a small amount of fee, saving the user from other unnecessary or hidden charges.
- Cryptocurrency has semi-anonymous nature which makes it suspicious and hosts for illegal activities including tax evasion or money laundering.
- The legal use of crypto currency varies from country to country.
Cryptocurrency has loopholes as well as appealing features. It is often criticized for its usage for illegal activities, instability, the vulnerability of infrastructure, exchange rate volatility but its astonishing features include transparency, portability, inflation resistance and divisibility. I hope now you know what is cryptocurrency.