Introduction
Something that has gained widespread popularity is cryptocurrencies. Or as we like to call it, the ‘Crypto Craze’. Let’s uncover the hype behind cryptocurrencies.
Crypto-currencies, these two words derived from the words cryptography and currency. Essentially, cryptography is a method of securing information and communications with the use of codes or through coding.
Further analyzing the definition of cryptography is – ‘crypt-‘ means ‘hidden’ or ‘a vault’ and the suffix ‘graphy’ stands for ‘writing’.
As the name suggests, cryptocurrency is a form of currency that lets you utilize cryptography for secure transactions.
Still something alien, cryptocurrency serves as a digital or a virtual currency, which is not tangible. It is neither owned through any centralized unit like a bank. Thus we can say cryptocurrencies are decentralized unlike your normal form of currency.
We will explain why that is, in a while. First, you might wonder what cryptocurrencies do.
Cryptocurrencies let you buy services and goods, or even trade them as our normal currencies do. Companies have been using cryptocurrencies, often known as tokens and these can be used to trade for goods and services.
Now, cryptocurrencies work through a technology called the blockchain.
Blockchain
A blockchain is a form of database, stores various pieces of information. Their storage is different from the traditional way of storing data. Blockchains store the data in blocks that are then chained together.
All new data comes as a new and fresh block. Once the block gets filled with data it is chained together with the previous blocks. This also makes the data chain in chronological order.
So far, blockchain has only been able to store information as a ledge for transactions.
Cryptocurrencies use this blockchain technology to function. One of the most well-known digital currencies on this planet uses this blockchain technology. This is what provides security to cryptocurrencies, they are encrypted in the form of a complicated puzzle.
Cryptocurrency
Cryptocurrency is all the rage as of this hour with the increasing desire for alternative medians of exchange in the years to come. Also with security as its prime motto, cryptocurrencies are on a high right now.
Cryptocurrencies that use this blockchain technology, are also decentralized and spread across many systems recording and managing transactions.
As time progresses, more and more cryptocurrencies are coming up. As of today, there are over 10,000 kinds of cryptocurrencies. The first Blockchain-based cryptocurrency was Bitcoin, which to this day remains the most popular and most valuable.
Cryptocurrencies majorly fall under two categories: Coins and Tokens.
The most common forms of cryptocurrencies are Bitcoin, Bitcoin Cash, Litecoin, Thereum, Ripple, Stellar, etc.
Why should one invest in Cryptocurrencies?
Cryptocurrency is the way towards the future, that is yet to be decided but we know this for sure, that it is a speculative and volatile market. It lets you explore a whole nother world of investing. Cryptocurrency is considered risky, but that doesn’t mean that it is a bad investment. Risks can lead to only two roads, but one should always make sure they are ready and comfortable with volatility and risk.
If you wish to gain exposure to the demand for digital currency. Being highly secure thanks to cryptography. There is no third party involved in the transaction.
Conclusion
Now we are pretty sure you know more about cryptocurrency than ever before.
We know that a cryptocurrency is a form of digital asset based on blockchains distributed across an enormous number of computers.
This decentralized structure allows them to exist outside the regulations of government.
Though cryptocurrencies may face several criticisms like being used for illegal activities, the exchange rate is volatile and the infrastructure vulnerable.
The major focus has been put towards the benefits the cryptocurrencies provide like transparency, portability, divisibility, and resistance to inflation.
How you feel about cryptocurrencies is something you should take the time to consider. And stay tuned for a lot more on cryptocurrencies!
