What is cryptocurrency?

You must have heard about cryptocurrency and why not, it is talk of the town these days. Blockchain, cryptocurrency and binance are often discussed simultaneously. If you are not use to with the concept and functioning of cryptocurrency, the question “what is cryptocurrency” may often arise in your mind. In this article, we will understand what is cryptocurrency, how does it work, how to buy and store cryptocurrency, its advantages and many more.

What is cryptocurrency?

Cryptocurrency is a special type of currency that exists and works in digital domain. Moreover, it is a secure way of transactions because it works based on cryptography. Bitcoin was the first cryptocurrency launched in 2009.

How does cryptocurrency work?

So, now we have come to know that what cryptocurrency is, its time to know how it works. The cryptocurrency works with a public ledger that is a blockchain. In the blockchain, all the transactions made by cryptocurrency holders are recorded. There is only one way to get cryptocurrency which ismining. In mining, computers are used in which the computer's power is used to solve the mathematical problem, and these problems generate the coins. Therefore, for mining cryptocurrency, you need to have a high-end computer. You can also buy the cryptocurrency from any broker or person who wants to sell it, and after this, you can store it in your digital wallet.
Suppose you own some cryptocurrency, you have the power to transfer the amount of cryptocurrency to any other account, but you can't withdraw the cryptocurrency. When someone pays in the form of cryptocurrency, the blockchain connects the account of the sender and receiver, and when the transaction is completed, it detaches the accounts. From this attachment and detachment, you can say that there are high chances of tracking the payment, but the situation is just opposite. Due to this attachment and detachment, many networks have been created, and it is impossible to track any one of the specific accounts. The main objective behind the cryptocurrency was to make a type of transaction that no one can track; if the transaction is not traceable, the chances of theft and account hacking will be less. The cryptocurrency is gaining popularity as well as acceptance across the globe and some experts believe that someday it could become more popular and acceptable than physical currencies.

Examples of cryptocurrency

There are a lot of cryptocurrencies available in the market, here are some most famous ones.

•    Bitcoin

Bitcoin was the first cryptocurrency introduced in 2009; if you think that the cryptocurrency is old because the release date is 2009, you are wrong. From 2009 to this time, it has been one of the biggest crypto currencies and holds approximately—half of the crypto currency market. Its price has gained a tremendous growth over the years and it is always on the top of cryptocurrency list.

•    Ethereum

Ethereum was developed in 2015, and it is the second-largest cryptocurrency after bitcoin.

•    Litcoin

Litcoin is very new in the cryptocurrency market, but its growth is fantastic. It has gained a place among the top cryptocurrencies in a comparatively short duration.

Advantage of cryptocurrency

Here are some of the major advantages of cryptocurrency:
•    The foremost advantage of cryptocurrency is that the transactions made are untraceable; untraceable means when we transfer the amount from the bank, it can be seen by a lot of authorities like bank staff, government authorities, and sometimes hackers can also access that record. But, it’s not the same in case of cryptocurrency as no one can track your transaction.
•    The cryptocurrency transaction has nothing to do with bank thus, it does not depend on banks; it allows you to transfer the funds anywhere. Furthermore, the payments made by cryptocurrency are fully digital, and all the records are stored in the digital wallet.
•    It has been named as cryptocurrency and here is the reason. For the verification of the payments, the cryptocurrency uses encryption codes; this code is unique for every cryptocurrency wallet. When you made the transaction through the cryptocurrency, this encryption code verifies the sender and receiver and passes the amount. Also, the encryption codes enable a network of code to make the transaction untraceable.

How to buy cryptocurrency?

There are many frauds happening in the name of buying or selling cryptocurrency. So, here is some authentic information on buying of cryptocurrency.

•    Select a cryptocurrency

There are many options available in the cryptocurrency market; you have to choose one based on your needs.

•    Select the platform

Once the cryptocurrency has been chosen, it’s time to purchase. In the next step, you have to choose one of the best cryptocurrency buying and selling sites. There are two ways to choose the sites either you can choose a traditional broker or you can also go for the cryptocurrency exchange. Traditional brokers are online brokers who help people in buying and selling. And the cryptocurrency exchange is a platform which allows sellers and buyers to interact and trade cryptocurrency. If you are new to purchasing cryptocurrency, then, in my opinion, you have to compare all the sites that you know; you can compare the charges, fees, storage, and other securities-related issues.

•    Placing an order

After doing all the above, you are set to order. But before ordering the cryptocurrency, you must know that this is not a physical currency, so the storage of this cryptocurrency is unique. For storage, you have to make an account on the cryptocurrency wallet. There are a lot of options available for a cryptocurrency wallet.

How to store cryptocurrency?

You can store the cryptocurrency only in digital wallets. When you are mining, you have to enter your wallet address, and when the mining is over, the amount of cryptocurrency is sent to your wallet. The same process happens in exchange. When you exchange the cryptocurrency, it goes directly to the wallet address you enter. Now question arises what is cryptocurrency bitcoin price?

What is the cryptocurrency bitcoin price?

In today's time, the cryptocurrency bitcoin price ranges between $29,000-$30,000.

How is cryptocurrency used?

Cryptocurrency can be transferred from one digital wallet to another easily. One can use it to buy different products and services online, exchange it for cash and use it to trade as well. It can be used in shops or websites that allow cryptocurrency transactions.

Conclusion

Cryptocurrencies are built on blockchain technology and use cryptography to ensure data security and end-to-end encrypted transactions. It is easy to buy and sell as global gaining popularity and acceptance as an acceptable mode of monetary transaction.  

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