What is Cryptocurrency? Here’s what you need to know
cryptocurrency is a type of digital currency that you can use to purchase goods and services. For secure transactions, cryptocurrencies depend on an extremely complex online ledger. Millions of people around the world have invested in these unregulated currencies in order to make a profit. Of all these popular cryptocurrencies, Bitcoin tops the list. In this article, we will dig deeper into cryptocurrency. Read on to find out more.
1. What is cryptocurrency?
Basically, you can pay via cryptocurrency in order to purchase goods or services over the internet. Today, several companies have released their own cryptocurrency. Known as tokens, they can be exchanged for goods and services. You can think of them as casino chips or arcade chips. You can use your real currency to buy cryptocurrency to make these transactions.
For transaction verification, cryptocurrencies use a state-of-the-art system known as blockchain. This decentralized technology is powered by many computers programmed to manage and record transactions. Security is the best thing about this technology.
2. What is the value of cryptocurrency?
Today, there are over 10,000 types of cryptocurrencies. And they are traded globally, according to reports from CoinMarketCap. Currently, the value of all cryptocurrencies is over $1.3 trillion.
At the top of the list is Bitcoin. The value of all Bitcoins is $599.6 billion, more or less.
3. Why are they so popular?
Cryptocurrencies have great appeal for a number of reasons. Here are some of the most common:
Some people believe that cryptocurrency is the currency of the future. Therefore, many of them invest their hard-earned money in the hope that the cryptocurrency will go up in value after a few years.
Some people believe that this currency will be free from central bank regulations because these institutions lower the value of money through inflation.
Some proponents prefer the technology that powers cryptocurrencies, which is blockchain. Basically, it is a decentralized registration and processing system, which can offer a higher level of security than conventional payment systems.
Some speculators opt for cryptocurrency simply because its value increases.
4. Is it a good investment?
According to most experts, the value of cryptocurrencies will continue to rise over time. However, some experts suggest that this is just speculation. Just like real money, this type of money has no cash flow. Therefore, if you want to make a profit, someone has to pay a higher sum of money to buy the currency.
In short, this was a basic introduction to cryptocurrency. Hopefully this article will help you get familiar with this new type of currency.