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| What is a cryptocurrency and how does it work? |
The importance of money as a form of judging a person's ownership of property has been known since the Late Stone Age. It started as a lump of stone, followed by iron plates, gold coins, silver coins, and now paper money and electronic money. One noteworthy fact is that across the timeline, the number of currencies people own increased and the value of each unit decreased.
This has come to the point where the banking system will eventually have to digitize the currency, all stored in a digitized form in the Reserve Bank. One step ahead of the agenda is the concept of Cryptocurrencies. This is different from money deposited in a bank, which can be accessed indirectly via check/credit card, or online banking.
What is cryptocurrency
Cryptocurrency is an online version of a currency, more precisely a digital asset. The name is derived from Cryptography, which is used to encrypt transactions and control currency production. It is a strictly monitored process as it uses Blockchain Technology.
In a nutshell, Blockchain technology is a distributed database used to manage and maintain a growing list of data blocks by collectively using (Blockchain) a peer-to-peer network. These data blocks may be in different locations and not connected to the same Processor. A database is a collection of records. A distributed database is a database that may be located in different locations and may not be connected to a common Processor. However, they may be located in the same or different physical locations and distributed across a computer network. On a blockchain, data once written cannot generally be edited or changed.
Although neglected earlier, banks, financial institutions, and businesses are increasingly recognizing its importance. Rather, they are afraid of losing the market called ' digital cash ' to a new currency.
Security and ease of exchange make them an ideal fiat currency exchange for the future, but few people know about Cryptocurrencies and it is believed that they are not secure. The recent surge in Bitcoin (Bitcoins) price and the simultaneous bragging of it on social media has garnered a lot of attention, but it may still be several years before it enters the mainstream.
What is cryptocurrency mining?
Mining cryptocurrencies requires a powerful combination of hardware and software. The value of a currency depends on the number of units of currency available in the market, so it must be carefully monitored and is a very reliable process. Cryptocurrency mining is simply the process of creating new units of cryptocurrency ( Cryptocurrency ).
To understand better, let's assume a large national economy with trillions of dollars in every bank. It is now physically impossible to store all these currencies in a bank, so we store them in digital form at the Central Reserve Bank. The Reserve Bank maintains a digital record of which bank you owe but does not keep the paper money in physical form. It simply prints when you need to put money into the system and run out of notes.
Although the reserve bank can print as many notes as possible, it does not print them out on its own for no reason. This is because when we issue more currencies and put more money on the market, we do not make people rich, but simply devalue existing currencies and cause inflation. The more currency units present in the market, the more their value is split.
The same is true for cryptocurrencies. Cryptocurrency mining is a carefully monitored process to ensure that existing units do not depreciate.
How is Cryptocurrency Pricing?
Although the market prices of various Cryptocurrencies (Cryptocurrencies) vary a lot, liquidity remains a common characteristic. Currently, the value of Cryptocurrencies fluctuates a lot.
As with almost all other products and services, the price of Cryptocurrency (Cryptocurrency) depends on supply and demand. More and more people demand a specific Cryptocurrency, and the tighter the supply, the higher the value. Then more units are mined to keep the flow going. However, many have chosen to limit the number that can be mined. For example, the number of Bitcoins (Bitcoins) is currently limited to a maximum of 21 million.
Cryptocurrency List
The actual list of Cryptocurrencies is vast, but there are over 800 cryptocurrencies to date, so we can only discuss a few of the most prominent here.
- 1 ] Bitcoin: Bitcoin (Bitcoins) (Bitcoins) is the most popular and highest-rated Cryptocurrency. Rather, most consider it to be the only cryptocurrency available on the market. (Cryptocurrency) Worth close to $600 per Bitcoin by mid-2017, this price suddenly surged and became a reason for interest in the cryptocurrency market ( Bitcoin ). (Cryptocurrency)
- 2 ] Ethereum: Although still in its infancy, Ethereum, launched in 2015, could be the cryptocurrency of the future. (Cryptocurrency) Decentralized, secure, and can be used for almost any transaction.
- 3] Litecoin: If Bitcoin is gold, Litecoin is silver. Litecoin is based on the basics of how a peer-to-peer system works with Bitcoin, but with improvements in technology. It has been substantially shortened from rather long transfer times for BTC (BTC).
- 4] Ripple: Ripple's decentralized finance technology allows banks around the world to transact directly with each other.
- 5] Dash: Dash or DarkCoin is a very secretive cryptocurrency. It is almost impossible to keep track of where the route went. It is more used on Darknet.
Read Bitcoin vs Litecoin vs Dogecoin – Cryptocurrency Comparison.
Cryptocurrency Market Price and Capitalization _
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| What is a cryptocurrency and how does it work? |
Currently, Bitcoin is priced at about $2500 ( close to $20,000 as of December 18) and has a market cap of about $42 billion, while Ethereum has a figure of 3700 $34 billion each . . You can see all the statistics here (here).
Cryptocurrency risk
With most transactions going online, cryptocurrencies have become a cause for concern as banks fear money-trading businesses moving online. There will be attempts to stop at this level. (Attempts) Recently, the US Congress introduced a bill to outlaw Cryptocurrency. It was an excuse to finance terrorism and corruption.
But in our opinion, Cryptocurrency is here to stay – and if one invests conservatively and carefully in them, one could end up making money!
