What Is Cryptocurrency? [Bitcoin and Altcoins Explained]

Cryptocurrency is the type of currency that is generated, used, and stored digitally only. It is the type of settlement that is made by exchanging the products or services digitally.

Cryptocurrency is in use with the help of separate technology known as Blockchain. With the help of blockchain, every transaction is recorded & the management of all the transactions is accomplished.

All cryptocurrency transactions are safeguarded by cryptography. In simple words, we can say that cryptocurrency is quite similar to regular money, but it is limited to a digital platform.

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Types Of Currency

Cryptocurrency is designed as an exchange medium for digital platforms. There are many types of cryptocurrencies, but some of them are well-renowned. These are as follows:

  1. Bitcoin (BTC)
  2. Litecoin (LTC)
  3. Ethereum (ETH)
  4. Ripple (XRP)
  5. Bitcoin Cash
  6. Ethereum Classic
  7. Zcash (ZEC)
  8. Stellar Lumen (XLM)

Bitcoin was launched in the year 2009, and it was the first established blockchain currency.

How To Buy Cryptocurrency

Coinbase is the most popular base where you can easily buy, sell, and exchange the cryptocurrency with other currencies as well. This platform will also help you in creating the wallet in which you can keep your cryptocurrency stored.

Cryptocurrencies can also be bought with the help of U.S. dollars, you can also purchase with any other type of cryptocurrency as well. If you want to buy a Bitcoin then you first need to create an account on the exchange platform and then you can easily transfer real money to that account to purchase the cryptocurrencies.

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Are Cryptocurrencies Legal?

I am not sure if it is legal in your country or not. It depends on the government of the country whether they give a permit for it or not.

As provided information, it is confirmed that the government of China has claimed its use as illegal in their nation.

Uses Of Cryptocurrency

Cryptocurrency is the digital form of currency that is used to carry out the exchange of services or products. Cryptocurrencies cannot be used as real money, you cannot keep it any of your bank accounts, you can’t open your cryptocurrency account, and also you cannot keep it in your physical wallet like your real money.

Cryptocurrencies can only be used on Blockchain. The users can utilize their cryptocurrency with the help of the codes which are used on the exchange platform. These codes are known as Public Keys and Private Keys.

Public Keys are used to receiving the cryptocurrency in your wallet. When you are asking someone to send you some cryptocurrency then you need to tell them the Public Key.

In case you are sending cryptocurrency to someone then to access your cryptocurrency wallet you need to enter your private key. Private keys act the same as your ATM password, which is used to withdraw the real money.

Private and Public both the keys are available on your wallet. It is just that public keys are available for everyone, whereas the private key is available only for you.

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Advantages Of Cryptocurrency

There are several advantages of cryptocurrency which are useful in daily routine. Some of them are as explained:

  1. Cryptocurrency has reduced the use of trusted mediator for transactions to occur between the payee and payer.
  2. It has made it easier to complete the transaction directly to the payee.
  3. The transactions which take place between the payee and payer are secured by Cryptography and also have certain codes to access all the information.
  4. Transactions are made with zero or minimum processing fees.
  5. Minimized the hassle of transactions.

Are Cryptocurrencies A Good Investment?

As we always say that beauty lies in the eyes of the viewer. The same is about cryptocurrency. Some of the investors found it interesting, whereas some of them found it like another theory.

Some of the investors find it similar to the greater fool theory of investment.

Cryptocurrencies do not generate any type of cash-flow so it generates a question that how its value will increase and how it could be the future currency.

If we talk about the currency of the future then it needs to be stable, so that the exact price for everything can be decided. But, if we consider bitcoin as the currency of the future then it is not possible, because it is unstable and it will not be helpful while determining the fixed price for any product or services.

Why Cryptocurrencies Are So Popular

Cryptocurrencies are found interesting by many people and it is because of several reasons. Some of the important reasons are as follows:

  1. Cryptocurrency followers see Bitcoin as the currency of the future and they are running hard to buy it all before its prices reach heights.
  2. Few of the followers favor cryptocurrency because the cryptocurrency has replaced the central banks or other bodies from the transaction process to make it more simple and acceptable.
  3. Cryptocurrency followers also like it because of its advanced technology. They find it more secured and focused than the banks or any other trusted third party.
  4. Some of the users just buying cryptocurrencies as a part of their investment. As cryptocurrency is not linked with any type of worth or value of it. So the percentage of cryptocurrency followers is because it is going to be a long-term relationship between the currency and them.

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