WHAT IS CRYPTOCURRENCY? | CAPITAL STREET FX

 

WHAT IS CRYPTOCURRENCY?

A cryptocurrency is a digital or a virtual currency that’s secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks supporting the blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they’re generally not issued by any central authority, rendering them theoretically resistant to government interference or manipulation.

Cryptocurrencies are systems that leave the secure payments online which are denominated in terms of virtual “tokens,” which are represented by ledger entries internal to the system. “Crypto” refers to the varied encryption algorithms and cryptographic techniques that safeguard these entries, like elliptical curve encryption, public-private key pairs, and hashing functions.

WHAT IS CRYPTOCURRENCY?
WHAT IS CRYPTOCURRENCY?

TYPES OF CRYPTOCURRENCY:-

Bitcoin$210.5 billion
Ethereum$48.6 billion
Tether$13.6 billion
XRP$12.2 billion
Chainlink$5.1 billion
Polkadot$5 billion
Bitcoin Cash$4.9 billion
Litecoin$3.8 billion
Binance Coin$3.5 billion
Crypto.com Coin$3.4 billion

Cryptocurrencies are systems that leave the secure payments online which are denominated in terms of virtual “tokens,” which are represented by ledger entries internal to the system. “Crypto” refers to the varied encryption algorithms and cryptographic techniques that safeguard these entries, like elliptical curve encryption, public-private key pairs, and hashing functions.

The first blockchain-based cryptocurrency was Bitcoin, which still remains the foremost popular and most precious. Today, there are thousands of alternate cryptocurrencies with various functions and specifications. a number of these are clones or forks of Bitcoin, while others are new currencies that were built from scratch.

Bitcoin was launched in 2009 by a private or group is known by the pseudonym “Satoshi Nakamoto.”1 As of Nov. 2019, there have been over 18 million bitcoins in circulation with a complete market price of around $146 billion.

Some of the competing cryptocurrencies spawned by Bitcoin’s success referred to as “altcoins,” include:-

  1. Litecoin, 
  2. b.Peercoin
  3. , and Namecoin, also as Ethereum, Cardano, and EOS. Today, the mixture value of all the cryptocurrencies alive is around $214 billion.

Bitcoin currently represents quite 68% of the entire value.

Is ARE CRYPTOCURRENCY GOOD?

Cryptocurrencies may go up in value, but many investors see them as mere speculations, not real investments. The reason? Just like real currencies, cryptocurrencies generate no cash flow, so for you to profit someone has to pay more for the currency than you did.

That’s what’s called “the greater fool” theory of investment. Contrast that to a well-managed business, which increases its value over time by growing the profitability and cash flow of the operation.

For those who see cryptocurrencies such as bitcoin as the currency of the future, it should be noted that a currency needs stability so that merchants and consumers can determine what a fair price is for goods. Bitcoin and other cryptocurrencies have been anything but stable through much of their history.

For example, while Bitcoin traded at close to $20,000 in December 2017, its value then dropped to as low as about $3,200 a year later. In September 2020, it was trading above $11,000.

This price volatility creates a conundrum. If bitcoins might be worth a lot more in the future, people are less likely to spend and circulate them today, making them less viable as a currency. Why spend bitcoin when it could be worth three times the value next year?

HOW DO I BUY CRYPTOCURRENCY?

While some cryptocurrencies, including bitcoin, are available for purchase with U.S. dollars, others require that you pay with bitcoin or another cryptocurrency.

To buy cryptocurrencies, you’ll need a “wallet,” an online app that can hold your currency. Generally, you create an account on an exchange, and then you can transfer real money to buy cryptocurrencies such as Bitcoin or Ethereum

Coinbase is one popular cryptocurrency trading exchange where you can create both a wallet and buy and sell bitcoin and other cryptocurrencies.

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