Cryptocurrency is a term we are quite familiar with, or at least acquainted with hearing about it from friends, or reading about it from news and social media. In this blog, we are going to discuss everything you ever wanted to know about cryptocurrency.
Stay tuned till the end so you could also know if you should be investing in it or not.
What is Cryptocurrency?
Cryptocurrency, also called crypto, is a type of digital currency decentralized, encrypted, and uses cryptography to secure transactions. Unlike the US dollars or Euros, Cryptocurrencies don’t have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.
In simple words, it is an alternative form of payment created using encryption algorithms. Cryptocurrencies are just like assets. People can invest and use it for online trading and buying.
Types of Cryptocurrency
Bitcoin was the only existing cryptocurrency till 2011 when rival cryptocurrencies began to appear.
Today, Cryptocurrency has several important types (Other than Bitcoin-which is the best cryptocurrency).
LiteCoin
Current Value = 59.98 USD
Litecoin is inspired by bitcoin and so the two are pretty much alike.
It has a better transaction rate than bitcoin, but it becomes pretty much complex. It is a decentralized currency like all other cryptocurrencies. It appeared in 2011, so it is also a veteran in the breed of cryptocurrencies. It has an open-source software project.
As per many experts, litecoin has a good future.
Tether (USDT)
Current Value = 1 USD
The idea behind tether is to combine the stability of a currency issued by a centralised system and the benefits of a cryptocurrency. It is one of the stablecoins; stablecoins are a group of cryptocurrencies that fasten their value to another currency or other reference point to reduce volatility. Even major cryptocurrency like bitcoin has suffered severe fluctuations, in these scenarios cryptocurrencies like tether provide a safe place for the customers. That is one advantage or benefit of these stablecoins.
Ethereum (ETH)
Current Value = 1,651.87 USD
Ethereum acts as a platform for decentralised applications by using blockchain technology. So now applications do not have to be distributed on platforms like Apple store or play store which use a certain percentage of cut from the revenue. So it is on one hand a digital currency and on the other hand, a platform for many applications.
Binance Coin (BNB)
Current Value = 313.06 USD
Although it was created as a token to pay for discounted trades, now it can be used as payment as well as for purchasing goods. It was launched by Binance- one of the major cryptocurrency exchange platforms.
Transaction fees are reduced for users in this way of transactions.
XRP
Current Value = 0.400486 USD
It has a lower processing time and lowers transaction charges than bitcoin. Currently, its value is less than half a dollar. It best suits the needs of the financial services industry like banks.
Cardano (ADA)
Current Value = 0.51 USD
Currently, its value is half a dollar. As per predictions, its value can reach a maximum of 24 dollars in 2030. It is created by the co-founder of Ethereum, so it also has a smart contact feature. It can provide peer-to-peer transactions with its internal cryptocurrency, ADA.
Solana (SOL)
It is a quite new cryptocurrency as it was launched in March 2020. It got hacked and $6m was stolen from 8,000 accounts.
Its current market value is approximately 40 USD.
Which is the Best Cryptocurrency?
Bitcoin
Current Value = 23087.70 USD
Bitcoin is the pioneer of cryptocurrency and also currently, it is the best cryptocurrency. Bitcoin has been the best-known cryptocurrency since its creation in 2009. It’s used as an alternative to conventional currencies and has gained popularity because of its simplicity, limited supply, and anonymity. It works on its blockchains. In 2022, it has been regarded as the best cryptocurrency. The fact to be acknowledged here is that it has had a roller coaster ride in terms of its value, but for so many reasons, it is still the most preferred cryptocurrency by the people. It can be said that it has set the standards for other cryptocurrencies and in fact, it has become the standard for cryptocurrency.
Cryptocurrency Wallet
The simplest way to define a crypto wallet is that if you want to invest in a cryptocurrency, you need to have a crypto wallet. As the name suggests, it is a wallet where you can keep your cryptocurrency. Binance wallet has the lowest fees to store the crypto while Coinbase is considered one of the safest wallets for storing cryptocurrencies. If you are looking for the safest wallet to store your crypto, you should consider using hardware wallets.
Other wallets include Electrum, Mycelium, MetaMask, Exodus, and Crypto.com. Of these wallets, Electrum is considered the best for Bitcoin.
To define the crypto wallets extensively, “A crypto Wallet is a software program or an Application used to store cryptocurrency, consisting of two key pairs-private keys and public keys.
Is CryptoCurrency a Secure Investment?
Risk and Reward’ are the right set of words to describe investing in cryptocurrency. As it is not centralized, so there is a risk of loss. At the same time, it is a highly profitable way. A much safer way of investing is buying the stocks of companies, but it is potentially less profitable.
The currency issued by the government or the centralized currency is controlled by the central banks so they can be considered much safer. On the other hand, decentralized currency or cryptocurrency is independent of the government’s control, so it’s potentially risky to invest in, but, as said earlier, highly, profitable. Now it’s up to you to decide whether you are gonna invest in it or not.
Cryptocurrency’s Transaction Method
Transaction in cryptocurrency is the transfer of Bitcoin value in the blockchain. In simple terms, when a participant gives a certain amount of his bitcoins to another participant.
How are the transactions done in crypto?
Well, bitcoin uses public-key cryptography to ensure safe transactions.
In the process of transaction, each participant, be it the receiver or the sender has pairs of public keys and private keys. To complete a transaction, a participant must share his pairs of public keys. Public keys are a series of letters and numbers that are shared during the process of the transaction.
On the other hand, private keys must not be shared with anyone. They are only used to spend the transacted crypto onto something.
Be sure to select the correct network for your fund, while sending or receiving crypto, otherwise your funds will be lost.
How Value of Cryptocurrency Increase?
As far as the change in the value of cryptocurrency is concerned, it follows the simple Demand and Supply Rule of Economics.
When there is a demand for a certain cryptocurrency, its value increases and when its demand is decreased, its value also falls. So, what determines the increase or decrease in the value of a cryptocurrency is the relation between its supply and demand. When demand increases faster than its supply, its value increases and vice versa.
Which Companies in the USA Accept Cryptocurrency?
Many big companies are daring to accept cryptocurrency. There could be different reasons for this step, like marketing strategy, or to stay up with the time as it is believed vastly that crypto is the future.
Here is a list of the companies that have taken the initiative to accept cryptocurrency as payment.
The Home Depot
The Home Depot is an American multinational home improvement retail corporation that sells tools, construction products, appliances, and services. It is the most significant home improvement in the United States. So, now you can build the whole house by using cryptocurrency.
Microsoft
Microsoft is an American multinational company that produces computer software, consumer electronics, personal computers and other related stuff.
Microsoft started to accept bitcoin in 2014. But later, they paused due to its volatility, but are now again accepting it.
Starbucks
Starbucks is again a high-profile American multinational company.
It’s a chain of coffeehouses and roastery reserves. With the launch of the Bakkt app, it will now be possible to make Bitcoin payments.
Tesla
Tesla is an automotive and clean energy company.
In 2021, it was said that Tesla purchased $1.5 billion of bitcoin.
It started accepting the digital currency for its vehicles sometimes. But later stopped, now there are chances that it will again start accepting crypto.
Which Products Can Be Purchased by Using Cryptocurrency?
Major retailers are reluctant to accept digital currency as a payment, but there are some ways of shopping using digital currency.
Here is a list of products and services that you can buy using cryptocurrency:
- Technology and E-commerce product
- Jewellery and Expensive Watches
- News Media
- Insurance
- Car, Morning Coffee, Gift Cards
- Electronics
- Subscriptions
- Games
- Groceries, Fast Food
- Flights
- Clothing
- Hardware and Tools