What is Cryptocurrency?
Cryptocurrency is based on cryptology.
It’s a digital currency that works as a medium of exchange with the encryption and algorithm techniques used for the security of transactions, verification of transfer of assets and also the creation of additional units.
Interestingly, cryptocurrency operates independently without the interference of the central bank.
How Cryptocurrency came into existence?
The first-ever cryptocurrency is known as bitcoin (in the form of digital payment all around the world) which was designed in 2009 by Satoshi Nakamoto a pseudonymous developer.
How does it work?
- Cryptocurrency transfers are made through the process called mining between the users of this decentralized digital currency.
- The algorithm and technical control methods that provide security to cryptocurrencies are extremely complicated.
- Functioning of Cryptocurrencies depends upon the various cryptocurrency first cryptocurrency came into existence was Bitcoin.
- Cryptocurrencies work just like traditional currencies that express value in units. For example, when you say “I have 4.0 Bitcoin,” similar to, when you say, “I have $4.0”.
- The general public just understands the basic concept, however, gradually gaining more knowledge of cryptocurrency as this idea is getting more common nowadays.
What are the types of Cryptocurrency?
There is a number of cryptocurrencies, but some of these are active such as largest coins Bitcoin and Litecoin; other coins are Coinye, Dogecoin, Ripple, and Enthereum.
The active cryptocurrencies generally have stable adoption and also comparatively high market capitalization with above $10 million in the majority of the cases.
How can you buy Cryptocurrency?
Here are four common ways to buy cryptocurrency let’s discuss:
Foremost of all, open a cryptocurrency wallet in order to buy and being able to hold coins. You have various options for wallets.
Every coin has a different wallet that can be downloaded from their website that also helps to mine coins.
However, if you open cryptocurrency wallet with biggest exchange sites for cryptocurrency you can purchase different coins and able to hold them in the same wallet for the easy process of selling-transfer.
The wallets are secure with SSL certificates and secure transactions, one just has to opt for a unique and strong password, not to mention, your password is confidential to avoid insecurity.
2Buy Cryptocurrency from Exchange Site
The most common way to buy cryptocurrency is from large exchange sites the safest path which ensures fast and secure transactions.
If you are a beginner, don’t worry you just need to register by creating an account, hardly matter of few minutes.
As matter of fact, the money transfer may take few minutes or days that completely depends on the method you have selected, so prepare your mind well it’s not always that you start purchasing coins immediately.
3Forums and Other Online Communities
You may also buy cryptocurrencies from various online communities. Online communities have people who sell coins on regular basis to other users.
It’s easy to purchase coin here because you can find users of the same intentions, so you can easily discuss points like a number of coins you are willing to purchase, the price and most importantly how to pay money.
After everything gets finalized you just need to provide your wallet address and the other user will send the coins to your wallet account and within 10-50 minutes you will receive the same.
4Buy Coins From Relatives Or Friends
You also have the choice to buy cryptocurrency coins from your relatives or friends if any of them deals in cryptocurrency or holds the coins which you want to buy.
It’s easy to trade coins you just need to figure out the number of coins, the price and finally make the payment as decided.
After this process, your relative or friend will send the coins to your wallet account and you will receive the same within an hour.
How its changing modern traditional currency?
Cryptocurrency existed a long time ago even before the introduction of first virtual currency although not in practical terms.
Cryptocurrency enthusiasts shared their notion of implementing mathematical and computer science principles to solve the shortcomings of traditional currencies practically.
The concept of blind money was invented by David Chaum with the help of algorithm which is still active and effective in the modern web encryption.
The algorithm is done for secure, inevitable exchange of information among different parties, laying the foundation for future electronic currency transactions.
In 1980’s Nick Szabo issued a cryptocurrency known as Bit Gold for the blockchain system that supports modern cryptocurrencies.
Despite, Bit Gold never earned the popularity and no longer act as means of exchange.
DigiCash an electronic financial transfer moved to the traditional mode of transfer, however, intermediaries and digital gradually received prevalence, for instance, PayPal.
In the late 1990s and 2000 most cryptocurrency in the United States was called as e-gold developed and controlled by a Florida-based company e-gold acts as a digital gold buyer.
The boom for the e-gold was in the mid-2000s with millions of active accounts who used to spent billions of dollars in transfers periodically.
Unfortunately, issue of security protocols raised in e-gold’s became easy for hackers and scammers to target, resultantly, financial loss for e-gold users.
Due to which legal pressure was increased during the period of mid-and-late 2000s, consequently, e-gold operation came to an end in 2009.
How are businesses approaching more for the Cryptocurrency?
In 2009, the first-ever cryptocurrency Bitcoin was released by Satoshi Nakamoto.
Bitcoin was used as a medium of exchange to merge user’s anonymity, decentralized control, record-keeping via a blockchain and a group of people started mining and exchanging the currency.
In late 2010, several other similar cryptocurrencies were introduced such as Litecoin.
In late 2012, WordPress was the first renowned dealer to accept payment in Bitcoin and after that many others, merchants followed the lead comprised of Expedia, Microsoft, and Newegg.com.
Today, cryptocurrency has gained acceptance worldwide and many merchants started to accept cryptocurrency as a legal method of payment.
Advantages of Cryptocurrency
Every concept has its merits and demerits lets some throw light on the following:
- Digital currency acts as a supporting value in a cashless economy.
- There is no control of government over cryptocurrency.
- Self-Policing and Self-Interested Communities participates in cryptocurrencies for dealing.
- Vigorous Privacy Protections are there so they are secure enough for transactions.
- Cryptocurrency is less expensive when compared to Traditional Electronic Transactions.
5Disadvantages of Cryptocurrency
- There is no system to control and regulate Black Market Activities.
- Easy to evade tax in some domains like online sellers.
- There is always the risk of financial loss in case of data loss.
- Chances of high price manipulation by the traders.
- Users can not chargebacks or refunds if a dispute arises between the parties.
Cryptocurrency is getting acceptance from masses worldwide by gradually eliminating the shortcomings of digital currencies.