Cryptocurrency: The New Mode of Exchange

  Summary :

Are you fond of cryptocurrencies and want to know about them? This article will help you know about crypto and some interesting facts about cryptocurrency. You will also know about different types of cryptocurrencies like Bitcoin, Ethereum, Litecoin, etc.

 

   Introduction :

A cryptocurrency, also called crypto is binary data designed to work as a medium of exchange and its records are stored in a ledger existing in form of a computerized database to secure transactions records.

The cryptocurrency was invented in the year 2009, and bitcoin was the first crypto designed by a programmer or group of programmers under the pseudonym Satoshi Nakamoto.

Unlike traditional currencies, these digital currencies are based on blockchain technology that works as a public financial transaction database.

There are different types of cryptocurrency other than Bitcoin, like Bitcoin Cash, Ethereum, Dogecoin, Ripple, Cardano, Litecoin, etc. But many investors consider bitcoin to be the original cryptocurrency. Cryptocurrencies are decentralized networks that do not owe to one person or a government. Each crypto has a different algorithm and the controlling process under a distributed ledger is enforced by a disparate network of computers.

 

   5 Popular Cryptocurrencies excluding Bitcoin

  1. Litecoin (LTC)

Litecoin is an open-source, global payment network that has no central authorities. It is a replica of bitcoin and built using the blockchain of bitcoin. The purpose of creating LTC is to solve issues with bitcoin like scalability.

LTC was developed in 2011 by Charlie Lee, an ex-Google engineer.

  1. Ethereum (ETH)

Ethereum was developed in 2015. Unlike Bitcoin, Ethereum is a platform that allows users to develop dApps (Decentralized Applications), tokens, and smart contracts. This cryptocurrency has Ether or ETH value.

Ethereum completes the transactions within few seconds, unlike bitcoin which takes 10 minutes for transactions.

  1. Bitcoin Cash (BCH)

Bitcoin Cash emerged from Bitcoin in 2016 to solve some of the existing problems of Bitcoin, especially regarding scalability and transaction fees. Due to the disagreement in the developers’ community regarding the changes required in bitcoin’s code, that gave birth to BCH.

  1. Ripple (XRP)

Ripple is known as a bankers’ coin due to its heavy focus on International Payment Transfers. The prime purpose of creating XRP was to make transactions cheap and fast.

Ripple works faster than traditional banks in processing transactions. If traditional banks take a week to complete an international transaction, XRP will complete it in few seconds.

  1. Stellar (XLM)

Like Ripple, Stellar also focuses on money transfers. Stellar’s network is designed to make cross-border payments faster and more efficient.

Stellar is different from other cryptocurrencies as it runs on a non-profit motive, so it doesn’t charge its users or institutions for using its network. It aims to uplift the developing economies that may not have access to traditional banks and investment opportunities.

 

   Pros of Crypto investment

  1. Crypto investment has the potential for high returns.
  2. It has protection from payment fraud. Bitcoins are just like digital cash that hackers can’t get their hands on in any way.
  3. It leads to immediate settlement and completion of international transactions.
  4. The great thing about BTC is that it gives users complete power over it, as well as the ability to keep their coins safe and stable.
  5. Bitcoin can’t be regulated or valued by any government or central bank. They can’t be stolen or seized by the government.


   Cons of Crypto investment

  1. Bitcoin prices are extremely volatile, rising and falling at a rapid rate.
  2. Cryptocurrency laws differ from country to country, so a lack of regulations, unfortunately, can lead to fraud and scams.
  3. Cryptocurrencies especially bitcoins will be effectively lost if the hard drive crashes or a virus corrupts the file.
  4. There is no refund if the cryptocurrency is lost due to any reason.


   6 interesting facts about Cryptocurrency

  1. They are taxable:  It means the tax agency of the respected country collects taxes from the earning made by crypto investment according to their norms.
  2. China is the biggest cryptocurrency miner: They have power over 70% of the mining crypto which is a process of verifying huge transactions of money.
  3. There are 5000 different currencies in the world. A lot of people’s desire to invest in it has lead to the creation of so many currencies.
  4. Cryptocurrencies can’t be judged: Many of the existing cryptocurrencies are useless and worthless but people still invest in them as the value of particular crypto may increase at once.
  5. Cryptocurrency can’t be banned physically: Many countries have discussed and planned to ban this currency so that the economic condition of a particular may not get affected. It is impossible to ban it physically because anyone can own a crypto wallet digitally.
  6. Cryptocurrency is limited: Many people think they can buy an endless amount of cryptocurrency but that’s not true. Crypto is limited which is why all these currencies keep increasing in value as there is less supply.



Conclusion :

Unlike traditional currency, cryptocurrency is a digital currency whose value varies with time and demand and not by region. According to researchers, cryptocurrency may replace complete traditional currency within the next decade.

Finally, crypto investment should be done wisely. Carefully consider your risk tolerance before moving forward and make sure investing in digital assets is appropriate for your investment strategy.

Readers are kindly requested to give their feedback and share any other information about the cryptocurrency not mentioned above.


Thanks for reading.

 

Written by: D.Vamsidhar, Content Writer

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