What is Cryptocurrency? All You Must Understand
Technology improvement has changed numerous things, such as how people work, shop, pay for goods, and communicate.
Many consumers and companies do not prefer the cash payment method, and this behavior has brought contactless payment options. The arrival of smartphones, on the other hand, has enabled consumers to easily pay for their items via digital registers.
The new payment system trending is cryptocurrency. Probably, you have heard about Bitcoin. This was the first cryptocurrency, but others are growing in popularity. However, today, there are over 2,000 different types, and they are developed every day. You may have heard about this “cryptocurrency,” and you fully don’t understand it. If you want to learn about cryptocurrency, read on. Let’s get started:
Types Of Cryptocurrencies
The first cryptocurrency was Bitcoin. Today, it is still a popular and valuable type in the market. There are thousands of cryptocurrencies having numerous functions and specifications. Some are "clones" of Bitcoins, others are built from scratch. All other cryptocurrencies are referred to as altcoins. Examples include Litecoin, Namecoin, Peercoin, Cardano, EOS and Ethereum.
Today, the value of all cryptocurrencies that exist in the market is about $214 billion, and Bitcoin has the highest value of 68%.
Benefits Of Cryptocurrencies
The advantage of cryptocurrency is that it is easier to transfer funds, you can even acquire Bitcoin, Ethereum, Litecoin and Bitcoin Cash with your own credit card. If you’re to transfer funds between two parties, no need for a trusted third party such as a credit card company or bank - you can transfer quickly and safely. The transfer of cryptocurrencies is secured by the use of private and public keys. It also uses different incentive forms, such as Proof of Stake or Proof of Work.
The modern cryptocurrency system has a user’s wallet, an account address with a public key. On the other hand, the private key is for the owner who uses it to sign transactions. Moreover, fund transfers require minimal processing fees to complete, thus avoiding the financial institutions steep fees and banks charge for wire transfers.
Why Cryptocurrency is Secure
Cryptocurrencies have been built with blockchain technology. The process is complex and technical, but you get a digital ledger that’s complex for a hacker to tamper with. It is secured by cryptography and thus nearly impossible for you to double-spend or counterfeit.
While transacting, it requires you a two-factor authentication process. The process requires you to fill in a username and a password before transacting. Later, you will be asked for an authentication code sent via text on your cell phone. The securities of cryptocurrencies are in place, but that doesn’t mean they are un- hackable. In 2018, hackers hit BitGrail for $195 million and Coincheck for $534 million.
The Bottom Line
Investing in cryptocurrency is risky and requires you to be careful. If you decide to invest in cryptocurrency, learn and understand about these cryptocurrencies choices. Do your research, ask experienced investors, and read reviews before you move forward.
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