For most of the decade, people have all heard about cryptocurrency. The first cryptocurrency to ever be introduced was Sell Bitcoin. It stepped into the trade market in the year of 2009, January.
Satoshi Nakamoto, a software engineer and developer successfully introduced the white papers of Bitcoins to the trade market in 2008 for the first time. Those papers had all the necessary details of Bitcoins like, its working principle, framework, methods of usage, market cap values, and limitations.
When it comes to choosing a suitable cryptocurrency, it might get quite problematic for you as more than 19000 crypto types are residing in the trade market in the present day. However, the below article might help you with the right knowledge for settling for a suitable cryptocurrency. Let us now understand all about cryptocurrencies from the following article.
What is cryptocurrency?
Cryptocurrency essentially refers to a digital currency that has been distributed over a series of computers on a large network. This currency is based on the technology of cryptography and blockchain combined. Every time there is a transaction using cryptocurrency, a block is added to the network.
This means that all the transactions are easily trackable and get recorded on a ledger. This ledger can be accessed by everyone. However, the names are still kept anonymous. Another very important aspect of cryptocurrencies is that they are completely decentralized.
This means that cryptocurrencies see no intervention from the government and exist all on their own without any kind of interference from any third party. People have seen how corruption in the world has been rising. Therefore, to combat this issue, the developer felt introducing such a digital token into the economy would be the best route.
Therefore, this is what cryptocurrency is. As you can understand there are many pros and cons to cryptocurrency as well.
Pros of cryptocurrency
Decentralized
As highlighted previously, this type of currency is completely decentralized in the sense that there is no kind of interference or intervention from any third party. This is one of the major reasons for the popularity of cryptocurrency in today’s market. In addition to this, we also see how even the developers have no control over the cryptocurrency.
Some currencies that were developed after Bitcoin have some form of developer bias still existing. You can use decentralized platforms such as Golden Profit for buying and selling cryptocurrencies.
Transparency
Bitcoin network runs on blockchain technology which stores every inch bit of information in the public ledger which is visible and accessible to the public. However, it does not allow anybody to see the details of investors as the codes are very difficult to crack. You cannot trick the system with this type of currency.
Since the blockchain network records all transactions you cannot evade the system as easily as you can with cash transactions.
Anonymity
Another noteworthy pro of using cryptocurrencies is that they are anonymous. Even though they have a public ledger that records all transactions a person’s true identity is always hidden. This makes it perfect for many and is also a major reason for the growing popularity in the growth of cryptocurrencies.
Cons
Illegal activities- Many people believe that cryptocurrencies are illegal in the world and only corrupt folks use them for illegal activities. It is not true though, if people use science for nuclear weapons and not computers, then science is nowhere to be blamed. Similarly, cryptocurrencies should not be blamed in any way.
This has brought a bad name for cryptocurrencies in general and made people skeptical of the concept.
Volatility
Cryptocurrencies similar to stocks can also be traded and invested on exchange platforms. In recent years, the number of cryptocurrency exchange platforms has grown to more than 400 platforms across the globe. Each platform offers a different price based on the trading value of its platform.
However, since there is no regulatory authority in the cryptocurrency market, people have often seen how prices can rise and fall in a volatile manner. This leaves the investor at huge risks; and without any protection from such risks, it may result in losses for the investors. You can use many exchange platforms for trading and investing in cryptocurrencies.
Like any other item of value, the cryptocurrencies have both good and bad. You have to make sure that you use it in such a way that it does not add to the negative quality.
