A cryptocurrency is a digital or virtual asset or an internet-based medium of exchange which uses cryptographic functions to secure financial transactions.
In simple words, it is decentralized digital money.
Like any currency, cryptocurrencies can be used to buy goods and services from different platforms.
But unlike other currencies, cryptocurrencies are digital and use cryptography to provide secure online transactions.
Cryptocurrency works on a peer-to-peer system that can enable anyone anywhere to receive and send payments.
Cryptocurrencies are stored in a digital wallet.
Uniqueness of Cryptocurrency
It is a electronic cash system that isn’t owned by any one party. There is no such bank like other physical currency.
It is built using blockchain technology. Blockchain describes the way transactions are recorded into time stamped and blocks. It is a very complex process which cannot be easily tackle.
Hackers can not tamper with the digital ledger of cryptocurrency.
How do Cryptocurrencies Work?
Cryptocur Currency uses decentralized technology to allow users to make secure payments and save money without having to use their name or through a bank.
They work on a distributed general ledger called blockchain, which is a record of all transactions updated by currency holders.
Cryptoccurency Should be Used?
Every form of investment has potential benefits and drawbacks. Cryptocurrency is no different.
Benefits of Cryptocurrency
- You can manage your transactions.
- You can track your payments at a time.
- You will have a end to end transactions which will be private.
- Transactions are very fast in cryptocurrencies, there are very less chances of delay.
- You can make international transactions efficiently.
- Transaction costs are affordable. There are very less taxes per transactions.
Drawbacks of Cryptocurrency
- There are no constant prices in these type of currencies, prices can be changed frequently time to time.
- Hackers can hack the cryptocurrency of yours, they have done in the past and they can do it in the future.
- Cryptocurrencies run the risk of becoming obsolete. Many currencies are no longer used today.
- Criminals use cryptocurrency because of many reasons. There is no location attached to wallet, transactions are quick and anonymous and large amount of currency can be sent.
- There’s a security backup in the event of a loss.
Types of Cryptocurrency
The first blockchain-based cryptocurrency was Bitcoin, which still remains the most popular and most valuable. The following cryptocurrencies represent the most widely popular industry projects (so far):
- Bitcoin Cash
Bitcoin is an innovative payment network and a new kind of money. It was the first cryptocurrency to successfully record transactions on a secure, decentralized blockchain-based network.
Bitcoin Cash is a cryptocurrency that is a fork of Bitcoin. It brings sound money to the world. It is a cryptocurrency launched in 2017 by forking the Bitcoin blockchain and changed the size limit of blocks added to the blockchain.
Litecoin is an encryption that allows instant payments to anyone in the world and can be mined efficiently with high quality mainstream material. It is a cryptocurrency that is largely similar to Bitcoin.
Ethereum is the second largest cryptocurrency platform with market investment, behind Bitcoin. It enables developers to build decentralized applications (DApps) on its blockchain.
Ripple enables banks, payment providers, digital asset exchanges and businesses to send money around the world using advanced blockchain technology. It is a real-time gross settlement system, currency exchange and remittance network created by Ripple Labs Inc.
Stellar is an open source decentralized protocol for digital currencies with Fiat money transfers that enables cross-border transactions between each currency pair.
NEO is also more than just a digital currency like Bitcoin. It is an entire blockchain platform. NEO is a smart contract platform, similar to Ethereum, that was created by a team of developers in China and was formerly known as Antshares.
Cardano (and its ADA coin) is an unusual and interesting cryptocurrency that has in the past flown a little below the radar. Cardano is a decentralized public blockchain and cryptocurrency project and is fully open source.
Peercoin, also known as PPCoin or PPC, is a peer-to-peer cryptocurrency utilizing both proof-of-stake and proof-of-work systems. Peercoin tokens are issued by stakeholders while the currency is regulated by a central authority through checkpointing.
Namecoin is a cryptocurrency originally forked from bitcoin software. Namecoin, the first fork of Bitcoin, is an information transfer and protection system which uses namecoins (NMC) as its currency.
The EOS token is the cryptocurrency of the EOS network. EOS is a next generation blockchain ecosystem that continues to receive heavy media coverage for its record-breaking ICO and unique characteristics.