Cryptocurrency is a digital form of money that has recently gained huge popularity. There are different types of cryptocurrencies in the market but Bitcoin has dominated the market with its blockchain technology.
What is Cryptocurrency?
Cryptocurrency is a genre of digital currency or virtual currency, which is secured by cryptography and generally exists electronically. The word cryptocurrency is borrowed from encryption techniques that have been used to secure the virtual currency network. Cryptocurrency is a method that makes the currency platform impossible for scams or double-spend. In this strategy, there is no real coin, you have to buy a coin virtually in cryptocurrency for a physical token. You can exchange cryptocurrency with someone on your mobile or computer without using a bank.
Types of Cryptocurrency
The most popular cryptocurrency is Bitcoin, the first blockchain-based coin in the virtual market, invented by a group “Satoshi Nakamoto”. Today, thousands of cryptocurrency coins are performing topped with various functions and specifications and new ones are constantly being created. Clone or fork bitcoin, Ethereum, litecoin, namecoin have also gained a lucrative market value.
How to Use Cryptocurrency
People use cryptocurrencies to make quick payments online which is dominated in terms of virtual “tokens”, to avoid the transaction fees that regular banks charge. Others hold cryptocurrencies as an investment, hoping prices will rise. The best way to invest in cryptocurrency is to connect with a debit card. The cards are verified by credit card, Visa, and Master card companies.
How to get Cryptocurrency
To buy cryptocurrency, you need an online exchange source or you’ll need a “wallet” an online app that can hold your currency. At first, you have to open an account on an exchange platform and then you can alter real money to purchase cryptocurrencies like Bitcoin or Ethereum. Some investors purchase cryptocurrency through a complex process called “Mining”, which needs prior computer equipment to solve complicated math puzzles.
How to store Cryptocurrency
You can store cryptocurrency in a digital wallet, which can be online on your computer or mobile or an external hard drive. If something goes wrong as your exchange platform goes out of business, you send money to the wrong person, you put your digital wallet password in the wrong place or your digital wallet is pinched then you will probably find that no one can take serious steps to help you recover your funds. And, since you usually transfer cryptocurrency directly without an intermediary like a bank, if you encounter a problem, often there is no one to approach you or save your investment.
Advantages and Disadvantages of Cryptocurrency
Cryptocurrency has the following advantages:
- The money transfer process between two parties will be easy without any third party such as a bank or any debit or credit card.
- It is the cheapest way of money transfer compared with other online transactions.
- Cryptocurrency payments are safe and secured and provide unexpected offers.
- In the latest cryptocurrency system, the user’s account address has a public key, and the private key is known as the owner’s “wallet”.
- The transfer is being completed with a nominal processing fee.
Cryptocurrency has the following disadvantages:
- The vital problem of cryptocurrency is, it is not certified by governments like the U.S dollar. If your stored third-party company goes out of business or is hacked, the government doesn’t take any responsibility to get your money back.
- Payments are not inevitable.
- Cryptocurrencies are not accepted far and wide and have narrowed value.
- The value of cryptocurrency depends on several factors such as supply and demand. An investment is worth a thousand dollars today but tomorrow perhaps it is worth only a hundred dollars and if the market goes down, there is no guarantee that it will rise again.
“Cryptocurrency can change market structure and maybe even the architecture of the internet itself ”…before investing money thoroughly analyze the facts and criteria of cryptocurrency.