What is Cryptocurrency – Easy to Understand Guide

Thus, in January 2021, I put INR 10,000 into the Matic cryptocurrency coin. It was worth Rs.6 at the time. But, in April 2021, its value soared from INR 6 to INR 170, resulting in a profit of over 2800%, or INR 2.83 lakhs. That is the power of the Earth’s future cash.

What is Cryptocurrency?

Coupled with the stock market’s frenzy, Bitcoin is gaining popularity among investors. Bitcoin is a digital or virtual currency that operates on the basis of digital files. Cryptocurrencies are built on the blockchain technology and function as a distributed, decentralized ledger. Cryptography protects the virtual currency, making it invulnerable. So it’s the digital currency that you buy with actual money.

You would have heard of Bitcoin if you had spent any time on the Internet. Bitcoin was invented in January 2009 by a mysterious figure known only as Satoshi Nakamoto. Yet Satoshi Nakamoto’s exact identity is still unknown. Many more people imitated his idea of the first blockchain database after the mainstream adoption of bitcoin. Many cryptocurrencies have risen to the top of the market and are currently dominating it.

Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH), polygon (Matic), Tron (TRX), and other projects by Vitalik Buterin.

Bitcoin has a market capitalization of over $735.31 billion dollars, while ethereum has a market capitalization of $324.78 billion dollars.

Why is cryptocurrency gaining so much popularity?

If pressed, I believe that in times of crisis, citizens have lost faith in central banks. Several banks have been damaged, bankrupted, or caught in a scam over the years, putting the public at risk.

If you look at the history of money, people used to transact with gold, then shifted to paper currency, and now Bitcoin is the world’s future cash. Cryptocurrencies are more personal and private because they are decentralized and do not involve a third party during the transaction.

Many had lost faith in the governing system because of the disarray and anarchy. It is where the belief in cryptocurrency was exposed. If you want to send money to another country, you’ll have to go through numerous levels of the banking system and government security, but you can skip this with cryptocurrency. When you use cryptocurrencies, your transactions will be peer to peer, similar to a WhatsApp conversation.

How does cryptocurrency work?

A cryptocurrency is a complicated computer program that is impossible to duplicate. Blockchain technology underpins cryptocurrency.

What is Blockchain?

It is a technology that uses a decentralized chain method to keep track of records. When a transaction is completed, the data is stored in blocks connected by a strong chain of systems, rather than on a centralized server. The previously formed block becomes more secure as each new block is formed.

When a Bitcoin transaction is made, the transaction data is stored in a block that is shared by all computers. A new block is formed each time the same Bitcoin is transacted, forming a chain of blocks, or blockchain.

Must Read: Cryptocurrency in the Future

Are cryptocurrencies a good investment?

Is it, therefore, a wise investment? Investing in cryptocurrency has the potential to make you a millionaire overnight. However, you risk losing all of your money. So, the more the possibility, the greater the risk. Investing in cryptocurrencies can help you diversify your wealth.

Thus, if I were given 1 lakh rupees, I would invest 20% in cryptocurrency, 50% in ETFs and equities, 20% in gold bonds, and the rest in my savings account. It makes no sense to put all of your money into one product.

In your investment path, cryptocurrency will be an excellent companion. Yes, cryptocurrencies are attractive investments that will secure your financial future.

Tech Tycoon Elon Musk on Investment in Cryptocurrency?

All things considered, Musk told TMZ, people should not put their life savings into digital currency. It’s far too soon.

But, if you want to speculate and have a nice time, there’s a decent chance that crypto is the Earth’s future cash, he said. What would it be at the time if it looked like this? Perhaps there will be something else. Whatever it is, it is just speculation at this point.

Although most cryptography funds do not regard money to be stored for the future, experts feel that individuals who receive it should only give what they are willing to lose.

Cryptocurrency Vs System:

Central banks and governments have been concerned about the rising popularity of bitcoin. Their main concern is that the decentralized system will strip them of their power. Their dissatisfaction is evident in their orders.

Bitcoin mining and trade have been prohibited in China, while cryptocurrency mining has been banned in Iran. Bitcoin prices have dropped 11% as a result of China’s crackdown.

Several economists argue that cryptocurrency is overvalued compared to its intrinsic value and that it will never be accepted as a mainstream currency.

The most serious issue with cryptocurrencies is its decentralized nature. Governments are concerned that cryptocurrency would be used for illegal activity, money laundering, terrorism, or tax evasion.

We are confident, however, that future government systems will be more welcoming than they are now.

How to invest in cryptocurrency?

Crypto investments are similar to stock investments, except they are significantly more volatile.

Here are the steps to get started investing in cryptocurrency:

  • Create a trading account on a platform that accepts cryptocurrency investments.
  • Deposit funds into your brokerage account from your bank (a few platforms do not enable UPI deposits, so make sure you have access to net banking).
  • Purchase coins with deposited cash.
  • Sell the coins later for profit or loss.
  • You can then withdraw the funds to your bank account.

Best Cryptocurrency to invest around the world:

  • BTC (Bitcoin)
  • XRP (Ripple)
  • Ethereum (ETH) is a cryptocurrency.)
  • LTC (Litecoin)
  • BCH (Bitcoin Cash)
  • Cardano
  • DOGE (Dogecoin)
  • Monero (XMR) is a cryptocurrency.)
  • SHIB (Shiba Inu)
  • MATIC Polygon)

Top 10 best crypto platforms where you can buy/sell your crypto:

  1. Coinbase
  2. Zebpay 
  3. BlockFi
  4. Kraken
  5. Cash App
  6. eToro
  7. Laden
  8. Crypto.com
  9. Binance 
  10. Bitcoin IRA

Where to keep your crypto safe and secure?

We later discovered multiple instances of cybercrime and hacking. As a result, you can purchase a hardware wallet, which acts as a ledger for your money.

It will protect your digital valuables including Bitcoins, XRP, and Ethereum. Your coins will be kept safe and secure in a ledger, making them unhackable.

Also Read: How Does Bitcoin Operate And What Is Bitcoin? 

Are cryptocurrencies illegal in India?

India holds a considerable amount of cryptocurrency. There are about ten million cryptocurrency dealers and investors in India. Yet, due to certain disinformation on the internet and in the media, many more potential investors are hesitant to participate in the event.

Cryptocurrencies are not prohibited in India. Everyone can buy, sell, and trade cryptocurrency. The currency was never opposed by the Indian government. Governor is simply attempting to prevent the misapplication of cryptocurrency and blockchain technology.

The digital currency could be used to fund terrorism and black money because transactions are peer to peer. The Indian government, on the other hand, is working on crypto regulation. India cannot afford to miss the train.

At this time, it’s reasonable to be skeptical of crypto. The digital currency has yet to realize its full potential, and some experts believe it is in the midst of a bubble. It would be immature to offer a full endorsement to a currency that can fluctuate by up to 20% every day just on a TWEET. It is still in its early stages. Transactions using cryptocurrency must be far more transparent than they are today.

*This is not a financial recommendation. Invest only in areas where you are comfortable taking risks and losing money. The information presented above is for educational purposes only.

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