CRYPTOCURRENCY - A BOON OR A BAN

             CRYPTOCURRENCY - A BOON OR A BAN

A cryptocurrency is a digital or virtual currency that is protected by encryption, making counterfeiting or double-spending practically impossible. Many cryptocurrencies are decentralized networks based on blockchain technology, which is a distributed ledger that is enforced by a network of computers. Cryptocurrencies are distinguished by the fact that they are not issued by any central authority, making them potentially impervious to government meddling or manipulation.

A cryptocurrency is a type of digital asset that is built on a distributed network of computers. They can exist outside the jurisdiction of governments and central authorities because of their decentralized nature.

Many industries, including banking and law, are expected to be disrupted by blockchain and similar technologies, according to experts.

Cryptocurrencies have a number of advantages, including the ability to send money more quickly and for less money.

CRYPTOCURRENCY EXPLAINED

Cryptocurrencies are digital or virtual currencies that rely on cryptographic technologies for security. They make it possible to make safe online payments without the involvement of a third-party intermediary. Elliptical curve encryption, public-private key pairs, and hashing functions are examples of encryption algorithms and cryptographic procedures that protect these entries.

Bitcoin and other cryptocurrencies may be mined or acquired on cryptocurrency exchanges. Not all e-commerce sites accept cryptocurrency payments. In reality, cryptocurrencies, especially well-known ones such as Bitcoin, are rarely utilized for retail transactions. Cryptocurrencies, on the other hand, have grown in popularity as trading tools due to their rising value. They are also utilized for cross-border transactions, albeit only to a limited degree.

HOW DOES CRYPTOCURRENCY WORK?????

Cryptocurrencies are based on the blockchain, a decentralized public database that keeps track of all transactions and is updated by currency holders. Mining is a technique that requires employing computer power to solve difficult mathematical problems in order to earn cryptocurrency units.

Mining is a technique that requires employing computer power to solve complex mathematical problems in order to earn cryptocurrency units. Users may also purchase the currencies through brokers and then store and spend them using encrypted wallets.

You do not own anything physical if you hold bitcoin. What you possess is a key that enables you to transfer a record or a unit of measurement from one person to another without the involvement of a trusted third party.

Despite the fact that Bitcoin has been present since 2009, cryptocurrencies and blockchain technologies are still in their infancy in terms of financial applications, with more to come in the future. Bonds, stocks, and other financial assets might all be exchanged using this technology in the future.

TYPES OF CRYPTOCURRENCY

There isn't a single "best" cryptocurrency because each has its own set of features based on the needs of the creator. Here's a rundown of some of the most widely used digital currencies and how they're utilized.

1. BITCOIN

Bitcoin is the first decentralized cryptocurrency that makes use of blockchain technology to allow payments and digital transactions. Rather than relying on a central bank (such as the Federal Reserve in collaboration with the US Treasury) or third parties to verify transactions (such as your local bank, credit card issuer, and merchant's bank), Bitcoin's blockchain acts as a public ledger of all transactions in the Bitcoin history.

The ledger can assist prevent fraud and another unapproved tampering with the money by allowing a party to show they own the Bitcoin they're attempting to use. Peer-to-peer money transactions (such as those between parties in different countries) can be made faster and cheaper with a decentralized currency.

2. ETHEREUM

Ether is a kind of Ether (Ethereum)

The Ethereum network's token, Ether, is utilized to conduct transactions. Ethereum is a platform that uses blockchain technology to enable the creation of smart contracts and other decentralized applications (meaning the software doesn't have to be distributed on app stores like Apple's (NASDAQ: AAPL) App Store or Alphabet's (NASDAQ: GOOGL)(NASDAQ: GOOG) Google Play Store, where the tech giants may take a 30% cut of any revenue). Ethereum is a software development sandbox as well as a cryptocurrency (the real coins are measured in Ether units).

3. Tether

Tether is a stable coin or digital money that is linked to a fiat currency, in this instance the US dollar. Tether's goal is to combine the advantages of a cryptocurrency (such as the lack of need for financial intermediaries) with the stability of a government-issued currency (versus the wild price fluctuations inherent with many cryptos).

4. Binance Coin 

Binance Coin is a cryptocurrency that was developed by Binance

Binance Coin, along with other digital currencies accessible for trade, is available on the Binance cryptocurrency exchange platform. Binance Coin may be used as a kind of money, but it also allows for the creation of tokens that can be used to pay fees on the Binance exchange and to fuel Binance's DEX (decentralized exchange) for app development.

5. US Dollar Coin

USD Coin, like Tether, is a stable coin that is tied to the US dollar. USD Coin, like Tether, is based on the Ethereum network. USD Coin was created with the goal of creating a "totally digital" dollar that has the same stability as US fiat currency but does not require a bank account or the bearer to reside in a specific nation. USD Coin is envisioned as daily money that can be used with merchants on the internet, rather than as an investment.

IS THERE A  DIFFERENCE BETWEEN  DIFFERENT SORTS OF CRYPTOCURRENCY TRADING????

Investing in cryptocurrencies is not the same as investing in a company's stock. Stock is a claim to a firm's earnings as well as ownership of the company. Purchasing cryptocurrency coins, on the other hand, is a speculative wager on the digital currency's price movement, which may be extremely volatile and is susceptible to the law of supply and demand because digital currency is not a dynamic asset. Using a digital wallet on trading software, cryptocurrencies may be swapped for other digital currencies or fiat currencies like the US dollar.

But, aside from trading, there are other methods to gain money. To gain incentives, certain cryptocurrencies can be "staked." After purchasing a cryptocurrency, an investor can keep it in their account and use it to validate transactions on the blockchain network. Proof of stake is a way of powering a blockchain network in which the owner of the cryptocurrency can earn a dividend by staking their holdings, which is generally paid in additional coins or tokens.

CME Group, a renowned derivatives exchange, offers futures contracts on Bitcoin and Ethereum in addition to trading digital currencies (NASDAQ: CME). Futures and options are derivatives that are used to protect against price volatility in the underlying asset.

IS CRYPTOCURRENCY A SAFE INVESTMENT???

Blockchain technology is used to create most cryptocurrencies. The method transactions are kept and time stamped in "blocks" is described by blockchain. It's a lengthy, complicated procedure, but the end result is a secure digital record of bitcoin transactions.

A two-factor authentication method is also required for transactions. To begin a transaction, for example, you may be requested to enter a login and password. You may next be required to input an authentication code given to your personal mobile phone through text message.

While security measures are in place, cryptocurrencies are not unhackable. Cryptocurrency start-ups have suffered significant losses as a result of a number of high-profile thefts. Hackers took $534 million from Coincheck and $195 million from BitGrail, making them two of the most valuable targets.