1. What is Cryptocurrency?
A cryptocurrency is purely a digital form of currency easing swift transactions. It enables its users to make and receive transactions from anywhere to everywhere. The transactions in this system are not verified by the government. They are rather stored in a public ledger. Cryptocurrency is stored in a digitalized wallet system.
As the currency is unauthorized by the government, it uses encryption to verify its transactions. The data between the crypto wallets and public ledger is stored by an advanced and complex coding system .
2. Benefits of Cryptocurrency?
The benefits of using cryptocurrency are countless. Like
- Swift and smooth transactions: The main intention of bringing cryptocurrency into existence was to ensure a quick flow of transactions from any part of the world. Cryptocurrency can be transferred or exchanged effortlessly with anyone and everyone.
- Solely owned and operated: Cryptocurrencies are solely owned by an individual. He/she is not responsible or answerable to the government of their crypto holdings. It is operated by a group of computers known as nodes. They store the transactions in a blockchain which is a public ledger. New units of currency are created by a process called mining. The miners compute by solving complex random numbers that solve the blockchain.
- Preventing inflation: As the demand for cryptocurrencies is increasing the value will steadily increase. This increasing value of the currency will help to protect the market forces from being hit by inflation.
- Assures security: The people using the digital mode of transactions have always been concerned about their privacy and security. Decoding the transactions from the public ledger which are in the form of complex equations is very difficult. This assures a sense of privacy and security to its users.
- Optimum/minimal transfer charges: One of the greatest advantages of using cryptocurrency is that it charges less amount of money for any transfer/exchange. This is a factor that people usually look for.
3. What are the four types of cryptocurrencies?
Here are some of the most commonly used cryptocurrencies all over the world:
- Bitcoin/BTC: One of the most notable cryptocurrencies, bitcoin has taken over the digital platform of currency. It is one of the most popular and ruling in the list of crypto currencies. Bitcoin was bought into existence in the year 2009 by a pseudonym, Satoshi Nakamoto.
It was designed in such a way that the transactions are verified by computer coding and not by the government. It relies on blockchain, which is a public ledger that stores all the transactions. These transactions are verified by a process termed mining. The miners solve complex system-generated equations. It is secured and encrypted using cryptography which is a specialized computer code. Over 18.8 million Bitcoins were circulated until September 2021.
- Cardano (ADA): The cryptocurrency is also called ADA which is named after a 19th-century mathematician, Ada Lovelace. Unlike Bitcoin, it casts itself as a next-level player with a third-generation blockchain platform. It depends on proof-of-stake (PoS), which means they do not require PoW calculations that involve a large amount of electricity usage. This shows that the network and work efficiency of Cardano are effective and strong.
- The developers are looking forward to designing a decentralized application. To accomplish this goal the Cardano is being built in five different phrases. The application will contain a ledger that stores multiple assets and contacts that can be verified easily.
- Binance Coin (BNB) : BNB is said to be the world's largest crypto currency exchange. This token was brought into existence so that it can be used in Binance as a mode of exchange. Binance was created in the year 2017. It works on Binance’s own platform of blockchain but previously it worked on Ethereum blockchain.
It allows its users to get trade discounts and can also be used for making payments, tourism and entertainment expenses and to avail other online services.
- Ethereum: Just like bitcoin, Ethereum is a blockchain network. It was designed to allow its users to create, publish and monitor applications in a user-friendly way. Hence is it is called a programmable blockchain. This blockchain also stores digitalized art and fine collectibles which makes it unique in comparison to the other cryptos.
4. What is a crypto wallet?
A cryptocurrency wallet is a digital form of wallet which accounts for two forms of keys public and private. These keys have the distinct function of providing security by encrypting the information. A private key enables the user to spend the currency from their address whereas a public key enables other users to make payments to the same address. Check here for Litecoin Price Prediction
5. Future of crypto currency?
In the coming years, cryptocurrency is likely to take a big turn in the economy. The pace it is travelling in reveals that it will soon take up the digital world into power. The demand for cryptocurrencies is inclining which is accompanied by an increase in it's value. More or less it has an intensive effort on the market forces. In the modern world, the thirst for technology in terms of currency is quenched with the creation of cryptocurrency.