What is Cryptocurrency and How many types are there?

Cryptocurrency Tips

A cryptocurrency is a digital currency built on a computer algorithm. It is a free currency that is secured by cryptography. You cannot touch it because it is not physically printed and it is not found in physical form. These are not issued by any central authority, so no one has any right over them. Cryptocurrency started with bitcoin in 2009. The very first cryptocurrency was bitcoin which was created by a Japanese engineer Satoshi Nakamoto. It was released as open source software in 2009. Initially, there was not much interest in the mind of the people, but its price gradually started increasing very much due to which the cryptocurrency again attracted the attention of the people.

Disadvantages of Cryptocurrency

Unfortunate Events

 Unfortunately a hard drive has crashed or a virus has corrupted the data as well as the wallet file, so bitcoins are essentially “lost” so they cannot be recovered in any way. can. Also bitcoin will have to be orphaned in the system forever. The poor bitcoin investor will be bankrupt in a matter of seconds. There is no recovery provision in these cases and the coins owned by the investor will also be permanently orphaned.

 Price Volatility        

Volatility is found in cryptocurrency i.e. the price of cryptocurrency does not remain constant. Its price increases rapidly and sometimes decreases rapidly. Some speculators try to take advantage of this but it is considered extremely dangerous by good investors so no one dares to invest in cryptocurrency.

Lack of Laws

• Another reason for the most significant lack of investment in this is that no country has made transparent laws regarding this. Its laws and taxes have been made differently in different countries, these laws lack clarity and avoidance of disputes. Lack of rules keeps the fear of fraud and scam.

No Central Authority

• There is no central authority governing cryptocurrency and therefore its minimum valuation cannot be guaranteed. If a group of industrialists decides to “dump” bitcoin and leave the system, its valuation will drop, causing huge losses to users who have invested large amounts of bitcoin. Its decentralized nature is considered both a blessing and a curse.

Some Unforeseen Events

• A person who has invested a large amount in cryptocurrency and he is the only person to know the storage wallet password, what if the person making the investment suddenly dies. A similar case was seen in Canada at the end of 2018. The owner of QuadrigaCX Company, the largest crypto exchange in Canada, died suddenly, causing the company to lose US$190 million in cryptocurrency because he was the only person with knowledge of the storage wallet password.

Advantage of Cryptocurrency

Freedom to Pay

The biggest advantage is that there is freedom of payment. If you have joined the trading market then you are entitled to this benefit. You can easily get bitcoin anytime, anywhere, and without any kind of limitations. Send or receive payment. Another special thing is that almost all payment options are present in it, out of which you can choose any option and get bitcoin.

There is no Tax rule in this

If bitcoin transactions are going on between two parties, then no third party can monitor them, so there is no practical way to get tax from people transacting bitcoins. Tax can be paid only if they consider it their duty to pay the tax.

Impossible to Reverse Transaction

Once you send bitcoins, you cannot reverse the transaction. And if you have handed over the ownership address of bitcoins to the new owner, once you change it you cannot own it again because the new owner has the associated private key, so you can own the coins if he wants. Otherwise it is impossible for you to own the coins. These factors ensure that there is no risk involved when acquiring bitcoins.

Very Short Process

The enthusiasm for cryptocurrency has also been seen among people because its transactions are generally done through a quick and straightforward process. You can transfer bitcoins from one digital wallet to another using just a smartphone or computer. This process takes very little time to complete and is also time-saving. You can use the remaining time in other work.

Based on Blockchain Technology

Every time you transact in cryptocurrency, it is recorded in a public list called a blockchain. Blockchain is a technology that works to enable its existence. Through this it is possible to trace the history of bitcoin. This allows people to spend the same coins that they have, this technology plays an important role in preventing copies or undoing of transactions.

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Types of Cryptocurrency

Bitcoin

The first cryptocurrency was bitcoin which was created by Satoshi Nakamoto in 2009. As of September 2021, there are more than 18.8 million bitcoin tokens in circulation, with a limit of only 21 million.

BNB

This crypto currency is considered one of the largest cryptocurrency exchanges in the world. BNB is a cryptocurrency token.The work was done to make it with a maximum of 200 million tokens.

XRP

This cryptocurrency was developed by Ripple Labs, Inc.. XRP coins are 100 billion which is a very limited number.

Polkadot

Polkadot was launched in May 2020.Polkadot was created by Gavin Wood, a member of the main founders of the Ethereum project.

Dogcoin

It was originally created to mock the widespread speculation on cryptocurrencies. But seeing this, the sky touched the sky.This is the opposite of the bitcoin cryptocurrency.

Unlimited coins can be minted in this.

  USD coin 

 This currency is similar to Tether, the USD coin is a stable currency pegged to the dollar, meaning its value should not fluctuate.The goal of having such a stablecoin is to emphasize on making transactions faster and cheaper.Some investors also believe that

    USDC is more transparent.

   Dominance of the Cryptocurrency Market

            The corona virus has had a massive impact on the global economy. This virus had spread to about 188 countries. Due to this epidemic many businesses were closed and many people lost their jobs. Most of the small businessmen were badly affected due to this virus but at the same time it also affected the big corporations badly. Well-known US company Apple announced the temporary closure of all its stores outside China and Bloomingdale’s also decided to do something similar with all its 56 locations. In such an environment of uncertainty, cryptocurrency has played its important role and caught the attention of the people. Along with this, banks also started buying cryptocurrency for the first time.

Banks in the US are working on building their own blockchain-based systems, including digital currencies, to enable B2B cryptocurrency payments between their customers. And also in October 2020, PayPal announced that its customers would be fully able to buy, sell and hold bitcoin and cryptocurrencies using their PayPal accounts. This will allow customers to buy things from the 26 million sellers that accept PayPal. Also in 2021, PayPal is planning to allow cryptocurrency to be used as a funding source as well.