All you need to know about cryptocurrency!

All you need to know about cryptocurrency!

Nowadays one or the other person is talking about bitcoin or etherrium or dogecoin. So what are they? They are cryptocurrencies, the virtual currency. This is the most trending topic not only in India but also in the entire world. The volatility of these cryptocurrencies is so high that people aren’t able to stop themselves from buying cryptocurrency.

In India it has been estimated that more than 10 million plus people are investing in it. The cryptocurrency has its own pros and cons and dealing in cryptocurrency comes up with the huge amount of risk.

What is Cryptocurrency?

Cryptocurrency is a digital or virtual currency. You can use cryptocurrency to purchase goods or services. And many people are investing in cryptocurrencies unlike the stock market.

Cryptocurrency is a digital payment system that doesn’t depend on any banks to verify transactions. Cruptocurrencies are stored in digital wallet.

Cryptocurrency is decentralized digital money, based on blockchain technology. A blockchain is an open, distributed ledger that records transactions in code.

There are multiple reasons that why cryptocurrencies have become so popular in the entire world, one of the foremost reasons are given below;

- Many experts are forecasting that cryptocurrency is a future currency and after seeing their investment in cryptocurrency even common people have started buying cryptocurrencies to save themselves from future high prices.

- The volatility of cryptocurrency is so high that induce people to invest in cryptocurrency to get more returns in future.

- Other people like the technology behind cryptocurrencies i.e. the blockchain. It’s a decentralized processing and recording system and can be more secure than traditional payment systems.

- Some people like the fact that cryptocurrency removes central banks from managing the money supply, since over time these banks tend to reduce the value of money via inflation.

How many cryptocurrencies are there and what are there worth?

There are more than 5000 kind of cryptocurrencies are traded publicly. Among them most popular are bitcoin, etherium, dogecoin, etc.

Check out the below table to know the worth of the highest market capitalisation cryptocurrencies.


Cryptocurrency
    
Market Capitalization    
   
Bitcoin   
   
$1.2   trillion   
   
Ethereum   
   
$263.4   billion   
   
Binance   Coin   
   
$87   billion   
   
XRP   
   
$81.8   billion   
   
Tether   
   
$45.4   billion   
   
Cardano   
   
$44.7   billion   
   
Polkadot   
   
$39.3   billion   
   
Uniswap   
   
$18.8   billion   
   
Litecoin   
   
$18.1   billion   
   
Stellar   
   
$14.9   billion   

How does cryptocurrency work?

A cryptocurrency is a medium of exchange that is digital, encrypted and decentralized.

The currency which we use regularly is managed by central authority; in India it is managed by the RBI similarly in other countries the currency is managed by respective authorities. But there is no any central authority to manage and regulate cryptocurrency.

In fact the task to manage the cryptocurrency has been distributed among the cryptocurrency users only.

Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. This technology is in used because this provides a high amount of security.

How to purchase cryptocurrency?

To purchase cryptocurrency you should have a wallet. It is a virtual wallet through which you can purchase a cryptocurency. Basically it’s an online app that holds your currency.

Generally, you create an account on an exchange, and then you can transfer real money to buy cryptocurrencies.

Moreover, it is convenient to buy and sell cryptocurrnecy with the help applications named as Paxful, Coinbase, etc.

Should I purchase cryptocurrency?

The decision to purchase cryptocurrency is completely upto you. If you are one of those who like to take risk then this is something meant for you. In case of cryptocurrency the price changes drastically and that too in a short period of time. Either you will earn a lot or lose lot of money.

The volatility of cryptocurrency is very high. If you think trading in stock exchange is risky then buying or selling cryptocurrency is way more risky. Buying cryptocurrency has its own advantages and disadvantages and it pretty simple format i.e. if you are earning out of it then you are at advantageous position and vice-versa.

Cryptocurrency is not illegal in India. Anybody can buy or sale or trade in cryptocurrency and also required to pay tax upon the same if received any income. But in India as of now there is no any regulatory body or authority to govern the cryptocurrency.

However, the government is also planning to introduce its own currency and also exploring crypto regulation.

Moreover in other countries such as US, Canada, etc. is completely legal to deal with cryptocurrency, though China has essentially banned their use. However, it is completely depending upon individual country’s policies to consider cryptocurrency as legal or not.

Conclusion

Is it risky to buy crptocurrency? Will I lose my money after investing in cryptocurrency?

Then answer is yes it is risky and might be you will lose your money. But then why 10 million plus people are investing in it? The answer is pretty simple because the volatility of cryptocurrency is high and there is huge chance of getting good amount of returns in a short period of time.

If you are one of those who have extra amount of funds and, likes to take risk and also can handle the situation if you lose your money then yes you should definitely invest in it because if the prices goes high then definitely there will be good amount of returns in your hand and if you don’t possess any of these then don’t proceed further.

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