What is Cryptocurrency?

Introduction:-

“Cryptocurrency has revolutionized the way we think about money. But what exactly it is and why everyone is talking about it let’s elaborate it in simple words.”

The word “Crypto” refers to “Hidden” and “Currency” means “Money or The System”. It is a type of mode of payment which secretly works in countries without providing the owner’s data. It uses a virtual accounting system and digital payment method. It is a kind of digital currency that enables online payments between users.

A digital ledger is a computerized database that uses strong encryption to secure records of transactions, control the generation of new currencies, and confirm the transfer of currency ownership, is where individual coin ownership records are kept.

Here are some things to know about Cryptocurrency:-

How Does Cryptocurrency Transactions Works?

Cryptocurrency transactions are executed via sending out electronic messages containing transaction instructions to the entire network. These instructions contain information like a timestamp, the quantity of cryptocurrency being exchanged, and the wallet addresses of the parties involved in it.

Suppose ‘Shashank’ wants to transfer 1 Bitcoin of cryptocurrency to ‘Prateek’. ‘Shashank’ starts the transaction by sending an electronic message with his instructions to the network, where all users can see the message. Shashank’s transaction is one of a number of transactions that have recently been sent. Since the system is not instantaneous, transactions wait with a group of other recent transactions waiting to be compiled into a block (which is just a group of the most recent transactions). The information from the block is turned into a cryptographic code and miners compete to solve the code to add the new block of transactions to the blockchain.

Once a miner successfully solves the code, other users of the network check the solution and reach an agreement that it is valid. The new block of transactions is added to the end of the blockchain, and Shashank’s transaction is confirmed. (This confirmation is not instant as it takes time for six blocks of transactions to be processed so that users can be certain that their transaction has been successful.)

What is the Use of Cryptocurrency?

It is important to consider whether or not Cryptocurrency’s success over the years is genuine or not. However, Cryptocurrencies, like Bitcoin,Ethereum have gained acceptability worldwide, despite the fact that they are still far from taking the place of traditional cash.

As a mode of payment.

Initially, Bitcoin had little value as a mode of payment to merchants. However, with time, several merchants worldwide like Restaurants, Flights, Jewellers, and apps have come to accept it as a viable payment medium.

One of the most notable acceptors of cryptocurrency as a viable medium of payment is Apple Inc. It allows 10 types of cryptocurrencies for carrying out transactions in the App Store.

Time when Cryptocurrency is used as a Currency :-

Bitcoin was firstly used to buy two Pizza’s in exchange of 10,000 Bitcoins on 22^nd May 2010 in today’s world this worth in millions of US Dollars. This transaction was marked as the first Real-World use of cryptocurrency. In Crypto Community, 22 May is celebrated as Bitcoin Pizza Day, acknowledging the moment when Bitcoin evolved from a virtual idea to a currency with real-world applications.

Investment

Cryptocurrencies, especially Bitcoin, is one of the most lucrative investment option currently. Its value appreciation is supremely dynamic and can prove to be an excellent way for capital expansion.

However, people must also note the volatility of this investment avenue. Bitcoin, the most popular Cryptocurrency with the largest market Capital, has experienced some of the most unpredictable price changes as an asset. For instance, in November 2021, Bitcoin’s value plunged from $69000 per BTC to $17000 per BTC.

What are the Different Types of Cryptocurrencies?

There are 10,000+ Cryptocurrencies but Bitcoin holds more than 50% of the total money deposited in Crypto market. Here are some most popular Cryptos :-

1. Bitcoin:-

Bitcoin is the most popular and first crypto in the world with the market cap of Bitcoin is $2+ Billion. It is founded by Satoshi Nakamoto in 2009, but no one knows who he is people know his name only.

• Altcoins

All coins except Bitcoin are Altcoins. However, some Altcoins are exponentially different from Bitcoin and use varying algorithms. For instance, Ethereum, which is an altcoin, is not a currency but a platform where entities can make their apps based on blockchain.

Currently, there are more than a ten thousand altcoins. Here is the list of top 10 Altcoins are:-

1. Ethereum (ETH)
2. Ripple (XRP)
3. Solana (SOL)
4. Binance Coin (BNB)
5. Dogecoin (DOGE)
6. Cardano (ADA)
7. Tron (TRX)
8. Avalanche (AVAX)
9. Chainlink (LINK)
10. ShibaInu (SHIB)

How can I invest in Cryptocurrency :-

If you are wondering how you can buy Crypto here is the step-by- step guide for you :-

1. Find a Trusted Platform :-

If you want to invest in Crypto you have find a platform where you can buy or sell the coins if you did not choose good platform you may loss you fund.

Here is the list of Good platform which I personally use :-

1. Binance:-

As of now Binance is the leading exchange in the entire crypto market.

Here’s the link :- https://accounts.binance.com/register?ref=166320247  if you interested you can consider it.

• Bybit :-

It can also be a great Exchange you can also go for it.

Here’s the link:- https://www.bybit.com/invite?ref=87KZJJ

• Coindcx:-

If you are from India you can go for it

Here’s the Link :- https://coindcx.com

1. Fund Your Wallet:-

After creating a account you have to fund the wallet  you can use your Debit card to load your wallet

First locate the buy Crypto option than click on that enter Debit card details and make payment and than you are  good to go.

You can also use P2P(Peer to Peer) method to load your wallet here you make payment to individual who want to sell his crypto and you want to buy it.

To use this feature you have find out p2p option and choose a seller from whom you want to trade with than enter the amount how much crypto you want to buy than you will get the payment details of the seller, make payment than click on “Mark as Paid” after verifying the payment seller will release the crypto and you will receive the amount of coins you bought.

Keyfactors you should consider while Buying using P2P:-

1. Use trusted Platform like – Binance, Bybit, etc….
2. You should only trade with Verified Users by the platform.
3. Check that Buyer/Seller you want to trade with, he should atleast completed 1000 Orders.

Keyfactor you should consider while Selling using P2P :-

1. Use trusted Platform like – Binance, Bybit, etc….
2. You should only trade with Verified Users by the platform.
3. Release only when you receive fiat currency in your bank account.
4. Sometimes fraudsters sends fake payment screenshot you should check you bank account after receiving the confirmation by the other party.
5. Do not make any calls and messages outside the platform keep all the chats on the platform chatbox.

After purchasing Cryptocurrency, you have to restore and protect it.

At Present you have various options how you can store your Crypto

1. Exchanges:-

First option has to keep the coins on the exchange where you bought but there is a risk factor involve in it. What if exchange scams or get Hacked and the fund from the exchange get wiped out than that will be your responsibility if your crypto got loose  meanwhile this  incidents are very rare but why you should take risk.

This risk gets lesser when you are using good exchange who can provide better security and have enough reserve fund for any circumstances so they can pay off by using that reserved fund.

• Online Non-Custodial Wallet:-

You can use Online Non-Custodial Wallet like Trust Wallet, Metamask, in here you get full control over your fund but it comes with various risk factors –

• Lost Phrase Key:- If you lose your Phrase/Private keys, your fund will get lost.
• Security:- If your device get compromised than there is the risk to loss your fund.

• Offline Non-custodial Wallet:-

Offline Non-Custodial Wallet are the best option if you want to hold high amount of Crypto but here’s also some risk factors:-

• You will lost the fund, if you lost the recovery phrase there is not option left after.
• Here is security risk gets eliminated because there is no internet connection with the Wallet.

Cryptocurrency Fraud and Scams

1. Rug Pulls

After raising money from investors, the developers of a new cryptocurrency project suddenly stop working on it, as a result project became worthless.

• Fake Wallets and Exchanges

Scammers create fake cryptocurrency wallets or exchanges in order to steal users private keys       or deposits.

You should use Trusted Websites only.

• Ponzi Schemes

Scammers attract people into a fraudulent investment scheme by promising high returns, Until the scheme fails, early participants are compensated with money the get form new investors.

• Phishing Scams

Scammer trick users by sharing phrase keys or login credentials through Message, Emails or Fake Websites.

• Investment Scams

Scammers approach influencer to promote a shit coins and when individuals buy that coin and price goes up than the influencer and scammer exits at top and dump that coin on Investors.

Always double check and analyze the parameter on what behalf you are going to invest.

Is Cryptocurrency Safe Or Not?

It depends on situations here are some examples.

Why Crypto is safe?

• Decentralization:- Blockchain Technology Ensures the transparency and reduce the risk of central authority frauds.
• Ownership:- You control your funds directly there is no central authority involved if you are using non-custodial wallet.
• Encryption:- Crypto are secure because of Cryptography.

Why Crypto can be Dangerous?

• Scams and Frauds:- Scams like Ponzi schemes, Investment scams, etc… are very common in Crypto world.
• Responsibility:- If you lose your private you are responsible for your financial loss.
• Market Volatility:- Crypto market is very volatile and can be highly Risky.

“ALWAYS DIVERSIFY YOUR INVESTMENTS “DON’T PUT YOUR ALL EGGS IN ONE BASKET”.

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