What is Cryptocurrency?


We can say cryptocurrency is other decentralized digital money. It depends on blockchain technology. There are over 20k various cryptocurrencies in the world, but it should sound to your ears the name bitcoin. We cannot simply put out finger on any authority in charge of cryptocurrency’s value. That keeps this currency unit far away from the USD and the euro.

Though this crypto is untouchable still, you can use this to pay for goods and services. Most people try to invest in stocks and buy properties with crypto. Now retake a seat retake. A seat is the most vital thing for you to listen to. Crypto is a for you to start investing, but you have to know reasonably enough about it before taking the hands-on. Basic knowledge about how the system works is necessary.

There are thousands of cryptocurrencies. Some of the best and popular known ones include:

Bitcoin

Bitcoin is the very first cryptocurrency. Still, it is the most buying and selling crypto. Satoshi Nakamoto developed this currency.

Ethereum

Ethereum was developed in 2015, and Ethereum is a blockchain platform with its cryptocurrency. It is called ETH. This is the most traded cryptocurrency after bitcoin.

Litecoin

Most people see this as an upgrade of bitcoin because of attractive features like faster payments and processes to allow more transactions.

Ripple

Ripple was founded in 2012. The mother company of ripple is cooperating with various banks and finance companies; therefore, ripple can track more than just cryptocurrency.

Dogecoin

It was created as a joke after the run-up in Bitcoin. The name, Dogecoin is originated from a meme featuring the dog, Shiba-Inu dog. Unlike many other cryptocurrencies which limits the number of coins in existence, Dogecoin has unlimited issuance.

What is a Blockchain?

Blockchain can be described as a transparent ledger for everyone in which every transaction is recorded in the code. Everyone can access this checkbook through their smartphone, tablet, or laptop. Every single transaction(blocks) is signed together.

“Imagine a leger where you write down everything you spend money on each day, Each page of the leger is similar to a block, and the entire book, a group of pages, is a blockchain.”

-Buchi Okoro-

CEO, Co-founder of the African cryptocurrency exchange Quidax

Two powerful validation techniques to prevent fraud are proof of work and proof of stake. Both are broadly used for verifying transactions before they are added to the universal checkbook, blockchain.

Proof of Work

Adding a block to the blockchain ledger by solving a mathematical puzzle is called proof of work. Everyone can participate in this task, and the first one to do is given a few amounts of cryptocurrency. Bitcoin offers 6.25 BTC for the successful validation of a new block.

Proof of stake

Reducing the power needed to check validation is the goal of proof of stake. Transaction count is limited for a person by the cc they will stake and also locked up in a communal safe for the chance to participate in the process.

For example, Solana, a cryptocurrency, can charge up to 3000 transactions per second, while bitcoin, the master of cryptocurrency, only takes ten transactions per minute. Ethereum, the biggest rival of Bitcoin’s, decreased its energy usage by 99.95% by closing “the final chapter of proof of work on Ethereum.”

The Crypto Mining Process

Mining can be explained as how new units of cc are supplied in return for validating transactions. It’s a piece of cake for an average person to mine crypto, but it’s challenging in proof of work.

The required power is increasing with the growth of the bitcoin network. Previously it was controlled by an average consumer, but with the addition of more people, it has become more expensive now. Now more users tend to optimize their devices to compete.

More energy is required for mining proof of work cryptocurrencies. For example, nowadays, bitcoin consumes electricity at a rate of 127 Twh.

But in comparison, the proof of stake shoots with an efficient gun. It needs just less power computing according to the system. But you have to have a cryptocurrency to participate in this method.

Usage of Cryptocurrency

You might be surprised when I say you can spend your crypto to buy groceries for your house. Yes, you can!

You can also use this currency to invest outside stocks and bonds.

Crypto is a spread currency. You can also compare it to a gold store value-wise. Most of the people on crypto find it as the ‘digital gold today.

Here are some services you can deal with cryptocurrency.

Tech product and Ecommerce sites

Newegg, Microsoft, A T & T are some tech companies that accept crypto payments. Shopify, Rakuten, and Home Depot also provide services for cryptocurrency.

Luxury items

There are luxury retailers that accept crypto payments. You can search Bitdials online. They sell Rolex, Philippe, and some luxury watches in return for bitcoin.

Secure purchasing with cryptocurrency

The answer to this question is dependent. It depends on the service or goods you are trying to buy. It would be best if you had a cryptocurrency wallet to make payments.

A famous hot wallet software makes direct contacts with the blockchain and gives access to the transactions. Transactions still need to be validated.

Crypto Exchange Services

There are a lot of crypto exchanges all over the internet. When selecting one, it’s critical to pay attention to factors like,

  • What are the supported assets?
  • Are the fees reasonable and affordable?
  • What are the payment methods available to deposit the funds?
  • How secure the platform is?
  • Is the customer service good?
  • Reputation of the company

Crypto.com, Coinbase, Kraken, and Gemini are some of the popular crypto exchanges. You are allowed to buy, sell or trade different types of cryptos using these exchanges. Due to the popularity it gains, there is a chance that cryptocurrencies could replace the traditional notes and coins in the future. It’s definitely worth to look in to it as an investment opportunity as many financial professionals suggest it as a good asset to have in your portfolio.


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