Here’s a simple guide to understanding the buzz around cryptocurrency
Is everyone around you talking about cryptocurrency? It can be nerve-wracking to be a part of such a conversation with nothing to contribute. The world is buzzing with the topic of cryptocurrency, where every news outlet, every social media platform, and every blog is discussing the best cryptocurrencies to buy. One headline after another, if you are interested to know about this subject that is taking the world by storm, here’s everything you need to know about cryptocurrency and the crypto market to sound like a geek in conversations.
What Is Cryptocurrency?
Cryptocurrency is a digital mode of payment that is decentralized. Decentralized services, like crypto, don’t need a centralized authority which gives them the ability to be censorship-resistant, secure, and hack-proof. There is not one, but many cryptocurrencies in the market. With few exceptions, cryptocurrencies work using a technology known as the blockchain, which stores transaction records. In simple terms, think of cryptocurrency as a digital coin.
How Many Cryptocurrencies Are There In The Market?
A whooping 6,700 and counting (new crypto coins keep launching)! Many companies have issued their own cryptocurrencies like Facebook’s Diem. Every crypto raises money through initial coin offerings or ICOs. As per the latest figures, the total value of all cryptocurrencies combined is US$1.82 trillion. Out of the lot, Bitcoin is the highest valued cryptocurrency with a market cap of US$762.70 billion.
What Made Cryptocurrencies So Popular?
Crypto enthusiasts believe that cryptocurrency, like Bitcoin, is the currency of the future. By using cryptocurrencies, we can eliminate the need for central banks to manage the supply of money since banks tend to reduce the value of money via inflation. Cryptocurrencies are built on blockchain technology, which makes this form of payment the most secure one out of all the current options.
Are Cryptocurrencies A Safe Investment Option?
We have a dedicated article for this which you can find here. But to summarize, the crypto market is extremely volatile. While a section of the population looks at cryptocurrency as a futuristic form of money, the other section just looks at it from an investment point of view – prices go up, you sell, you get profit, and vice versa. Bitcoin started off with a value that is equal to peanuts, but now the price skyrocketed. Think about the people who invested in Bitcoins when they were first launched, they made millions in profit.
Just like a stock market, crypto investment is a game of risk. Over the course of time, the majority of cryptocurrencies increased in value with frequent lows caused by large hedge funds and government regulations. But if you have the funds to take risks, it’s a wise bet.
Are Cryptocurrencies Legal?
The answer to this depends on where you are from. If you are from China, then according to the most recent regulation from the Chinese government, cryptocurrencies are illegal in that location. In fact, this news created quite a big impact causing the entire crypto market to crash. If you are from The United States, cryptocurrencies are legal and many companies are accepting payments in the form of Bitcoins. In India, there are no conclusive regulations yet. But you can buy, hold, and sell cryptocurrencies, instead of exchanging them for goods and services. The same is the case with the rest of the world.
How To Buy Cryptocurrency?
To invest in cryptocurrency, you need to know about crypto wallets and cryptocurrency exchanges. A Crypto wallet is an online app that will store your digital assets. To buy the digital coins, you will need to make an account with a crypto exchange of your choice. Here’s a list to help you get started. Once you have the account, you have to choose the crypto of your choice and buy it by placing an order on the platform. Here’s a detailed article on how to buy cryptocurrencies.
As of now, the cryptocurrency market is in the recovery phase after the recent market crash. If you are ready to make an investment, now is the time to take advantage of the low prices. Here’s a list of top cryptocurrencies that will help you make a smart investment decision.
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