What is cryptocurrency?

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CRYPTOCURRENCY – EVERYTHING YOU NEED TO KNOW

CRYPTOCURRENCY – EVERYTHING YOU NEED TO KNOW

Today in the modern economy, we have real money in paper and coins form and also Digital money in the form of electronic wallets, debit and credit cards, etc. which are controlled by central or common authorities.

Cryptography is a similar concept for digital currency but in a decentralized manner i.e., no servers involved for processing transactions and no central authority to govern.

Cryptocurrencies let you buy goods and services, or trade them for profit. Here’s more about what cryptocurrency is, how to purchase it and what are they worth?

Here you can go with :

  • What is cryptocurrency?
  • Why are cryptocurrencies so popular?
  • How cryptocurrency is purchased?
  • How many cryptocurrencies are there? What are they worth?
  • Top 10 cryptocurrencies by market capitalization
  • Crypto exchange
  • Conclusion

Let’s hash it out.

WHAT IS CRYPTOCURRENCY?

A cryptocurrency is a form of payment that can be exchanged online for goods and services. It is just like paper currency, only that it is not physical. A fun fact is that a cryptocurrency is a decentralized form of money, meaning it is not and cannot be regulated by any government or group of governments.

It mainly works on the principles of cryptography (a method of protecting information and communications through the use of codes so that only those for whom the information is intended can read and process it.) The prefix’ crypt’ means ‘hidden’ or ‘vault’ and the suffix ‘graphy’ stands for ‘writing.’

Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security.

WHY ARE CRYPTOCURRENCY SO POPULAR ?

In simpler terms, cryptocurrency is a decentralized digital currency, a medium of exchange, which is not issued by any central bank or financial institution. They can be bought and sold via cryptocurrency exchanges, where price fluctuations are visible. The reason why cryptocurrency has boomed is because of its ease of transfer. To exchange cryptocurrency between two parties, there is no need for a third party or a middleman.

HOW CRYPTOCURRENCY IS PURCHASED ?

So, the answer is that in order to purchase a cryptocurrency, you must open a digital wallet that can hold your currency. This is the place where you can use your currency and can purchase or sell goods or services . Generally, you create an account on an exchange, and then you can transfer real money to buy cryptocurrencies such as Bitcoin or Ethereum.

So, whenever the term cryptocurrency is used, Bitcoin comes hand in hand. The original and first form of cryptocurrency was called Bitcoins, after which other forms like; Ethereum, Litecoin, Dark coin, dash, and the likes were brought on stream.

Bitcoin hit the market first in 2009 and has been flooding the business world ever since. The drastic rise in bitcoin was so much that its value went from $1000 to over $19,000 in 2017 alone. This is the first and most popular of all forms of cryptocurrency.

Ethereum is another form of cryptocurrency that kick-started in 2015. Its uniqueness is that it allows for smart contracts and DApps usage without any glitch or scam. Not to omit that it regulates interaction from third parties, and it does not give downtime.

Litecoin, another form of cryptocurrency, started in 2011 and rose to be the silver to bitcoin’s gold. This is because it is very similar to bitcoin, only that it has a faster transaction rate.

HOW MANY CRYPTOCURRIENCIES ARE THERE? WHAT ARE THEY WORTH?

More than 10,000 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website. And cryptocurrencies continue to proliferate, raising money through initial coin offerings, or ICOs. The total value of all cryptocurrencies on July 23, 2021, was more than $1.3 trillion — down from April’s high of $2.2 trillion, according to CoinMarketCap. The total value of all bitcoins, the most popular digital currency, was pegged at about $608.6 billion — down from April high of $1.2 trillion.

TOP 10 CRYPTOCURRENCIES BY MARKET CAPITALIZATION

CryptocurrencyMarket Capitalization
bitcoin$608.6 billion
ethereum$240.4 billion
Tether$61.8 billion
Binance Coin$48.6 billion
Cardano$37.6 billion
XRP$27.4 billion
USD Coin$26.9 billion
Dogecoin$24.9 billion
Polkadot$12.5 billion
Binance USD$11.5 billion

“Any centralized currency will be replaced by decentralized currency”

CRYPTO EXCHANGE

Crypto exchange was reported to have grown over 10 times as it used to be giving a 47% growth for Q1 2020. More so, the United States-based crypto market exchange liaised with that of India, giving access to crypto-to-crypto conversion and trading services from April. A lot of investors found safety in digital currency as traditional assets declined due to the coronavirus pandemic.

Regardless of all of this growth, in June 2020, the government reconsidered banning cryptocurrencies based on a report that was moved by the finance ministry for inter-ministerial consultation. However, the crypto exchange executives reverted that cryptocurrencies can be regulated as commodities, and the nation will suffer rivals from businesses, traders, and enthusiasts based on their constitutional rights.

CONCLUSION

In the future, there is going to be a conflict between regulation and anonymity since several cryptocurrencies have been linked with terrorist attacks, government would want to regulate how cryptocurrencies work; on the other hand, the main emphasis of cryptocurrency is to ensure that their users are kept anonymous.

“Future of money is digital currency”-Bil Gates

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