OVERVIEW OF CRYPTOCURRENCIES
A cryptocurrency is a virtual currency, or we can call it digital currency, because it is available only online, not in physical forms like INR or Dollar.
Cryptocurrencies are generated with blockchain technology. We need to mine these with the help of encryption algorithms.
Cryptocurrencies are decentralised. This means these have no central issuing or regulating authority.
To use cryptocurrency, we need a cryptocurrency wallet.
How does cryptocurrency work?
Cryptocurrencies are running continuously online. For this operation, these use a distributed public ledger called the blockchain.
Each cryptocurrency unit is created through the mining process. Mining is a process of solving complicated mathematical problems. After solving each problem, a single coin is generated and distributed.
We can directly buy, sell, and use cryptocurrencies using cryptographic wallets. A cryptographic wallet is a cloud-based service that we can install as software or app on our smartphones or computers.
Bitcoin is the first cryptocurrency introduced in 2009 by Satoshi Nakamoto. At present, we have lots of cryptocurrencies available in the market.
How to mine Cryptocurrencies:
- For mining cryptocurrencies, we need specific advanced hardware with good Internet speed.
- We must go through the blockchain mechanism and active this processing on our system.
- The mining rate is slower, and the process runs continuously.
- Once the cycle is complete, the coin is generated and distributed.
- Miners are rewarded with cryptocurrency coins.
- This mining process is very complex and consumes much electricity and time.
How to buy cryptocurrencies?
- Choosing a platform like cryptographic wallets that offers cryptocurrencies like WazirX.
- Now add money to your wallet.
- In India, payment transfer from your bank account to your cryptographic wallet is not allowed. So, you can use the P2P method, in which you can buy dollars and use these to buy crypto.
- Select the amount or units of crypto you want.
- Place the orders.
- The cryptocurrency is transferred to your wallet.
- You can spend this crypto on those platforms where it is accepted.
Types of Cryptocurrencies:
Each cryptocurrency has its encryption algorithm. So, the mining rates and process may little differ, but the concept is similar.
The value of a single unit of specific crypto is quite different from another cryptocurrency. These can be evaluated based on their single unit price in real currency. At present, Bitcoin and Ethereum are the top most and costliest cryptocurrency. Here is the list of a few famous cryptocurencies:
- Bitcoin (BTC)
- Litecoin (LTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Ethereum Classic (ETC)
- Zcash (ZEC)
- Chainlink (LINK)
Is cryptocurrency safe?
Yes, blockchain technology is a hard stone to crack for hackers. Each cryptographic transactions need a two-factor authentication process. It is virtual and digital, so if it will steal, then easily traced.
Where can we use cryptocurrency?
Cryptocurrency is new in the market. Some people believe in it, and some are not. Most countries still do not accept cryptocurrency. Some countries have banned it already. But a few are looking forward to it. Big brands and private organizations are using cryptocurrency for transactions. We can use crypto in technology and e-commerce sites for purchasing luxury goods, cars, insurance, etc., also we can do payment transfers and fund transfers in the form of crypto exchange.
Cryptocurrency is safe, but mining technology is not suitable for the environment. If, somehow, we can convert this into green technology, then it is good to go. It is good for investment purposes. Cryptocurrency is the future currency. It is good to go through the process and prepare ourselves for the upcoming.