What is Cryptocurrency? A starter’s guide
Cryptocurrency is becoming a buzzword nowadays. So, what is the reason behind this? Here, we will give complete guidance to the starters if they wish to proceed ahead with it.
What is Cryptocurrency, and how does it work?
Explaining it, in brief, will not make a much clearer image of cryptocurrency. So, we will be going slow, mentioning every tiny detail to make the concept clear for beginners.
Cryptocurrency is a digital currency, high in practice these days. Well, it is so much popular because there is no involvement of any bank. It is well known as a decentralized system. Here, the control is not over the hand of any regulatory body. Therefore, it is getting high attention from everywhere.
It is a medium of exchange. However, it uses Cryptography to work. Cryptography is a way of utilizing encryption as well as decryption to make a secure communication. It is to eliminate the ill intents if poised by any third party.
Cryptocurrency uses a computational algorithm that undergoes several security layers. The algorithms used in it make it difficult for anyone to hack it. Therefore, it is highly secured. There is a public key(a sharable key) and a private key(the secret key that acts as a signature of the user).
What is an example of Cryptocurrency?
Many cryptocurrencies are catching the eyes of the users. Among them, some of the top examples are:
- Bitcoin
- Ethereum
- Litecoin
- Zcash
- Tether
And there are many more so far.
Why cryptocurrency is so special?
No doubt, the future will lie with the digital mode of currency exchange. Among them, the most common will be cryptocurrency. Many reasons support cryptocurrency over the traditional medium of currency exchange. These are reasons that will make the future rely on it.
- Lesser transaction costs:- Making transactions needs some amount. It is transaction costs. With the introduction of cryptocurrency, there will be an absolute NO or lesser charges. Don’t worry about the charges. It will be slightly lower and will only be charged when the transfer of money will occur between the bank and the digital wallet.
- Available anytime:- Sometimes during the making of transactions, you might have experienced a server down. It will either make the amount deposited to the account of the partner or sometimes the money stays in your account. It leads to a misunderstanding at some point also. But with cryptocurrency, there will be no such barrier in the path. It will be available 24×7.
- No limit:- Do not get confused with this bullet point. Cryptocurrencies are limited. I used this point to show that there will be no hassle on the limit on its purchase and withdrawal.
- Freedom:- Cryptocurrencies provide freedom for anyone to use them.
- Faster transactions:- No doubt, there will be a faster transaction due to it. It will even excite you more to say that the international transactions will be also faster. Usually, 10 seconds in the case of Ethereum.
Apart from these, there are other reasons also that are making it different than others. Being a decentralized system, easy verification of fund transfer and allowance of adding new units based on certain conditions are some of them.
Future of cryptocurrency
It is said that the future of currency will be cryptocurrency. Let us see how possible it is.
- Many peoples support it including Jay Clayton, CFA Institute, etc. Many people are criticizing it. Some of the popular names include Bill Gates, Richard Bernstein, Mark Carney, and many more. It is because of its anonymity feature in which users are kept anonymous. Thus it gives easy access to terror attacks. So, cryptocurrency will like to get suffered from the conflict between the two.
- Besides, there is a prediction of cryptocurrency occupying over 25% of the national currencies by 2030.
- There will be an increment in its acceptance by the transaction between the merchants and the clients.
- The prices will continue to fluctuate, thereby increasing the curiosity amongst a large section of the audience.
Yes, this is all about cryptocurrency and how it is going to occupy the space shortly. For more such stories, stay connected with startupinstyle.
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