Cryptocurrency is an internet-based currency that can be used to buy or sell goods and services.
Can cryptocurrency make you rich?
Cryptocurrency can make you rich. Cryptocurrency has turned several rags to riches. But it takes proper research and analysis, as well as for cryptocurrencies, which are quite volatile. You can probably make a good profit by buying and holding till the value rises.
What's the difference between cryptocurrency and physical currency?
Cryptocurrency is not regulated by any national authority whereas physical currencies are issued by the central government of a country.
How Does Cryptocurrency Work?
Suppose you have some amount of cryptocurrencies with you. You are going to purchase services/goods. First of all, the blockchain/ledger will check the source of cryptocurrencies you got from, initially, from your address. The public address is also known as the public key which is made up of long alphanumeric strings. After that, you will be asked for a digital signature and after verification, your transaction will proceed.
Blockchain: It is a distributed ledger technology that store data on thousands of servers globally.
Cryptocurrency mining is a process in which transactions are verified and stored in the blockchain. Cryptocurrency miners get paid for being auditors.
Mining prevents the double-spending scenario. The pay which they get for mining gets reduced by half every 4 years.
Double-spending:It is a situation where the cryptocurrency owner spends the very same bitcoin twice. Although it is not possible in the case of physical currencies but it can be possible with cryptocurrency as the owner could unlawfully duplicate the cryptocurrency token.
The idea behind Cryptocurrency:
As we know that almost all goods and services require currencies which are either notes or coins issued and regulated by the central authority of a nation.
Why it was introduced?
In 2009, Satoshi Nakamoto came up with the idea of creating a digital currency that would change the way people think about currencies.
He launched a digital currency named Bitcoin, which is not regulated by any central authority but by computer-generated math. All the complex processes and tracking regarding bitcoin are done by blockchain.
It was created so that people don't have to rely on authority, banks, or companies.
Some of the most traded cryptocurrencies:
1. Bitcoin (BTC)
The first-ever cryptocurrency was made in 2009. Currently, it is the most valuable cryptocurrency. Each bitcoin is a computer file that is stored in a digital wallet. The founder of bitcoin is still anonymous to us with the name Satoshi Nakamoto.
2. Bitcoin Cash (BCH)
It is a fork of bitcoin and it was created in 2017. According to a prediction, the value of a bitcoin cash in 2025 will ultimately reach 9200 USD. A fork is basically defined as when blockchain divides into two potential paths forward.
3. Ethereum (Ether)
Ethereum is not a cryptocurrency but it is blockchain technology and Ether is the cryptocurrency. Ethereum was founded by Vitalik Buterin in 2015. If we consider BTC and BTE as a single cryptocurrency, then Ether is the second most popular cryptocurrency. The software used by Ethereum is EVM 1 Bytecode, which is a low-level programming language.
4. Ripple (XRP)
Ethereum Ripple was introduced by Chris Larsen and Brad Garlinghouse in 2012. The number of transactions has gently increased over time so there is a possibility for Ripple XRP to become a part of the traditional cryptocurrency ecosystem.
Conclusion:
Cryptocurrency uses blockchain for transactions, verifications as well as currency issuance. Cryptocurrencies are free from the manipulation and the policies of national authorities and companies.
They are created digitally via robust computers which can process and solve multiple and complex mathematics. As per some analyst's predictions, the future of cryptocurrency is going to be significant. Although the value of cryptocurrency depends on how media and external agencies portrait it in front of people as well as supply and demand, which usually increases if it is popular enough.
We've discussed some of the major cryptocurrencies and Bitcoin is certainly going to get a major rise in its value in the coming period.
