Cryptocurrency Whenever you go to buy anything from the market, you need money to buy it, Which is the physical form of notes and coins. At present, there are many ways of digital payment, so that you do not need to carry money in your pocket. You can pay digitally through a mobile wallet or credit card. Now a new type of currency has started trending in the digital age, which is called cryptocurrency. We also discuss about Cryptocurrency List Binance US.
So I thought why not today you should be given complete information about what is Cryptocurrency. Since this topic is being discussed in full swing, then it becomes your right that you also know about this subject and educate others. Then without delay, let us know what is this Cryptocurrency and how many types of it are available.
What is Cryptocurrency
A cryptocurrency is a digital or virtual currency used as a medium of exchange. Whoever you see today is running after Cryptocurrencies. In a very short time, Cryptocurrency has expressed its power in the financial market. Cryptocurrency can also be called digital money because it is available only online and we cannot do it physically. You cannot see and touch this currency, it can be used only through online medium.
Governments apply other currencies like Pound in UK, Dollar in USA, Euro in Europe etc. to the whole country and are used in the same way these currency is also used all over the world.
As we know Cryptocurrency is also called digital currency. It is a type of digital asset which is used for the purchase of things or services. Cryptography is used in these currencies. This is a Peer to Peer Electronic System, which we can use through Internet to buy Goods and Services in place of regular currencies. It is believed that Cryptocurrency can also be used in a wrong way.
The first cryptocurrency which came into existence in 2009 is named Bitcoin. It was invented by Satoshi Nakamoto. The price of this currency has grown so fast that today it has become the most expensive currency in the world. The price of 1 bitcoin is currently more than 50000 USD. At present, you can do an online google search about its value. If we talk about all the cryptocurrencies, then the first one that became famous among them is Bitcoin. It was also made first and it is also used the most. There have been many controversies regarding Bitcoin, but today Bitcoin is at the top of Cryptocurrencies. Here I am going to tell you about some other Cryptocurrencies about which you may already know.
Cryptocurrency how does it Works
This currency is secured with the help of cryptography. Cryptocurrency uses cryptographic functions for financial transactions. It maintains decentralization, transparency, and immutability through blockchain technology. Cryptocurrency can be sent directly between two parties using private and public keys.
Cryptocurrency transactions between people take place using “cryptocurrency wallet” software. The person doing the transaction uses the wallet software to transfer his balance from one account to another. To transfer funds, a password related to the account is required.
Transactions between people are encrypted and then broadcast over a network of cryptocurrencies. and is added to the to-do queue in the public ledger (record-keeping system). The transaction is then recorded through the process of “mining” on the public ledger. All users of any cryptocurrency have access to the ladder if they choose to access. Here the amount per transaction is public but who sent the transaction is encrypted.
Each transaction is associated with a unique set of keys. Whoever simplifies us to the set of keys makes us the owner of the cryptocurrency associated with the key, just as the owner of a bank account gives us the account of all the money, together with a lot of transactions. Add me in the laser. Miners add sequentially to blocks of transactions. This is the reason why Ledger and this technology is called “Block” “Chain”. It is a “chain” of “blocks” of transactions.
How to invest Cryptocurrencies
Are you also thinking of investing money in Cryptocurrency, if so, before that you should know very well what is this Cryptocurrency and how is it trading. These days it has become a topic of discussion in the world. Its returns have surprised the investors, but the kind of return it gives, the risk is also accordingly.
To invest in Cryptocurrencies, you have to choose the right platform. Because if the right platform is not chosen then you may have to pay extra fees while trading. Similarly, the most popular Cryptocurrency platform in the whole world at present is “Binance”. It is very easy to invest and trade in it and its founder has provided all kinds of facilities in it. Many of my friends and relatives have also invested in it and have done for many years. You can also invest your money in it if you want.
The investment process involved in bitcoin is similar to the steps involved in investing in stocks –
- The first step is to open a brokerage account with a firm that allows crypto investments.
- Then one has to deposit money from his bank account to the brokerage account.
- The cryptocurrency must be purchased using a deposit or a cash balance.
- It can then be sold at a later date for profit or loss.
There is an increasing interest in investing in cryptocurrencies among investors all over the world. Trading is done through crypto currency exchange in this. Cryptocurrencies are bought and sold on this exchange based on the current market value. Where their price is determined according to the demand and supply. The way shares are bought and sold on a stock exchange, you can buy crypto currency on a crypto currency exchange at a fixed price and sell it when you get a profit. Like the stock exchange, there is a fee to be paid for trading on the crypto currency exchange. So if you are thinking of investing in crypto currency, then first of all, know about the three types of transaction fees charged on trading them.
Charges to Buy Cryptocurrency
Exchange fees are required to fulfill a crypto buy or sell order. Most of the crypto currency exchanges in the world have a fixed fee model, but the final cost of the transaction depends on the platform on which the transaction is completed. In such a situation, better research should be done about which crypto currency exchange is charging the lowest transaction fee. Apart from the fixed fee model, the crypto exchange also has a maker-taker fee model. The seller of crypto currency is called maker and the person who buys it is called taker. Under this model, fees have to be paid according to the trading activity.
Network fees are paid to cryptocurrency miners. These miners use powerful computers to verify and validate a transaction and add it to the blockchain. In a way, it can be said that it is the job of these miners to ensure whether a transaction is right or wrong. Exchanges do not have direct control over network fees. If the network congestion increases i.e. more transactions have to be verified and validated, then the fee increases. Generally, users are allowed to pre-set the transaction fee while using third party wallets. But on the exchange it is automatically set by the exchange itself so that there is no delay in the transfer. Users who are ready to pay higher fees, their transactions get completed sooner and those who have kept the fee limit low, their transaction may take some time to complete. Miners are paid for electricity cost and processing power.
Cryptocurrency is kept in a digital wallet. This wallet is similar to an online bank account in which crypto currency is kept safe. Most wallets do not charge any fees for depositing and storing crypto currency, but there is a fee for withdrawing or sending it. This is basically network fees. Most of the exchanges offer in-built wallet facility. Crypto wallets offer the option to buy systematic cryptocurrencies and recharge smartphones and DTS services through its integrated merchant gateway.
How should One Choose a Portfolio?
An investor can choose a portfolio in two ways – Index investing and selection investing.
This method delegates the responsibility of asset selection to algorithms and mathematical formulas. Cryptocurrencies are divided into asset categories such as utility tokens, platform coins, produce farming tokens, storage coins, etc. And the portfolio will include investments as per these categories. Then, the asset number or quantity is determined and the asset is weighted to finalize the investment.
In this method, the investor spends a lot of time in selecting his portfolio elements after doing extensive research. This puts the entire responsibility on the investor and is seen by many as an empowerment.
Keep in Mind before Investing in Cryptocurrencies
Cryptocurrencies are highly volatile and currently come with a lot of risk. It is important to understand the risk involved and be calculative about your investments.
There are many cryptocurrency options and bitcoin is not synonymous with cryptocurrency – it is just one of a dozen others like Ethereum, Litecoin, and Ripple.
Reading the cryptocurrency whitepaper will provide a good insight into the workings of the cryptocurrency.
It is advisable to invest when the cryptocurrency is at the peak of the bubble and not to invest when it crashes.
The track record of the team members who build the cryptocurrency is important.
The market capitalization of cryptocurrencies matters because they can present an accurate picture of growth potential.
The liquidity and volume of the trading coin is important.
Social media activities can provide some good insights and opportunities but it is not advisable to invest based only on the information gained from that end.
A dose of skepticism is necessary – in fact most experts should agree that the investor should be prepared for some losses. Therefore, if you are a risk averse, then avoid investing in cryptocurrencies altogether.
What are the types of Crypto Currency Cryptocurrency List –
If seen, there are many Cryptocurrencies but there are only a few of them that are performing well and which you can use apart from Bitcoin. In today’s time, there are about a thousand cryptocurrencies, of which the most popular is Bitcoin, apart from this, many other currencies are also becoming very popular. The names of some popular cryptocurrency list are –
- Bitcoin [BTC]
- Ethereum [ETH]
- Litecoin [LTE]
- Ripple [XRP]
- Diem [Libra]
- Tether [USDT]
- Monero [XMR]
- Peercoin [PPC]
- BitTorrent [BTT]
- Cosmos [ATOM]
1. Bitcoin (BTC)
If we talk about Cryptocurrency and not talking about Bitcoin, then it is not possible at all. Because Bitcoin is the first cryptocurrency in the world. Which was created by Satoshi Nakamoto in 2009.
It is a digital currency that is used to buy goods and services only online. It is a de-centralized currency, which means that there is no hand of the government or any institution on it.
If we talk about today, then its value has increased a lot, which is now around 13 Lacks, the value of a coin. From this you can find out about the importance of its present.
Like Bitcoin, Ethereum is also an open-source, decentralized blockchain-based computing platform. The name of its founder is Vitalik Buterin. Its Cryptocurrency token is also called ‘Ether’. This platform helps its users to create a digital token, with the help of which it can be used as currency. Recently, a hard fork has split Ethereum into two halves, Etherem (ETH) and Etheriem Classic (ETC). It is the second most famous cryptocurrency after Bitcoin.
3. Litecoin (LTC)
Litecoin, also a decentralized peer-to-peer cryptocurrency, is an open-source software released under the MIT/X11 license in October 2011 by Charles Lee, a former Google Employee. Bitcoin has a big hand behind its creation and many of its features are dangling from Bitcoin. Litecoin’s block generation time is 4 times less than that of Bitcoin. Therefore, the transactions in this are completed very quickly. In this, the Scrypt algorithm is used to do mining.
4. Dogecoin (Doge)
The story of the formation of Dogecoin is quite interesting. It was jokingly compared to a dog by Bitcoin, which later took the form of a cryptocurrency. The name of its founder is Billy Markus. Like Litecoin, Scrypt Algorithm is also used in this.
Today the market value of Dogecoin is more than $197 million and it is accepted in more than 200 merchants all over the world. Mining in this also happens very quickly as compared to others.
5. Faircoin (FAIR)
Faircoin is part of a much larger grand socially-conscious vision which is a Spain-based co-operative organization also known as Catalan Integral Cooperative, or CIC.
It uses the blockchain technology of Bitcoin, but with a more socially constructive design. Like other cryptocurrencies, Faircoin does not depend at all on mining or minting new coins.
But instead, they use certified validation nodes, or CDNs, for block generation. To verify coins in Faircoin, ‘proof-of-cooperation’ is used in lieu of proof-of-stake or proof-of-work.
6. Dash (DASH)
Its earlier names were XCoin and Darkcoin, Dash, meaning ‘Digital’ and ‘Cash’. It is an open-source, peer-to-peer cryptocurrency similar to Bitcoin. But it has more features than Bitcoin such as ‘InstantSend’ and ‘PrivateSend’. In InstantSend, users can easily complete their transactions, while in PrivateSend the transaction is completely safe, where the privacy of users is given great importance. Dash uses an uncommon algorithm called ‘X11’ whose specialty is that it becomes compatible with very less powerful hardware so that more and more people can mine their currency on their own. X11 is a very energy-efficient algorithm, which consumes up to 30% less power than Scrypt.
7. PeerCoin (PPC)
Peercoin which is completely based on the Bitcoin protocol and in which many source codes are found in both. In this, to verify the transaction, not only the Proof of Work is relied upon, but also the Proof of Stake system is also taken into account.
As the name suggests, Peercoin is also a peer-to-peer cryptocurrency similar to Bitcoin, in which the source code has been released under the MIT/X11 software license. Peercoin also uses the SHA-256 algorithm similar to Bitcoin. And it requires very little power to do transactions and mining.
8. Ripple (XRP)
Ripple was released in 2012 and it is based on distributed open-source protocol, Ripple is a real-time gross settlement system (RTGS) which runs its own Cryptocurrency which is also known as Ripples (XRP).
It is very much and famous Cryptocurrency and has an overall market cap of around $10 billion. According to their officials, Ripple provides users with “secure, instant and nearly free global financial transactions of any size and without any chargebacks.
9. Monero (XMR)
It is actually born from the fork of Bytecoin in the year 2014 and since then it has made a famous profit. This cryptocurrency works in all systems such as Windows, Mac, Linux, Android, and FreeBSD.
Like Bitcoin, Monero also focuses on privacy and decentralization. The most important difference between Bitcoin and Monero is that high-end GPUs are used in Bitcoin, whereas consumer-level CPUs are used in Monero.
Advantages of Cryptocurrency
The cryptocurrency rate is growing very fast, investing in it is a profitable deal. If you have more money then you can invest in buying cryptocurrencies from it. Cryptocurrencies can be easily bought and sold through a digital medium, for this, you will need a digital wallet. With this, you can also shop on many online sites. You can also convert cryptocurrencies into your local currency through the exchange service.
The chances of fraud in cryptocurrency are very less.
If we talk about Cryptocurrency, then they are more secure than a normal digital payment.
Transaction fees are also very less in this if we talk about other payment options.
Accounts are very secure in this because different types of Cryptography Algorithm are used in it.
Disadvantages of Cryptocurrency
There is no control of the government of any country on cryptocurrency, when its price will increase and when it will come down completely, nothing is known about it, so the investment made in it is very risky. Through this, illegal things can be done in the purchase. Online things are also prone to hackers, your account can be hacked and misused, although it is not such an easy task.
The use of cryptocurrency has been legalized by many countries, you will be responsible for the transactions done through it and the profit and loss made in the investment. In cryptocurrency, once the transaction is completed, it is impossible to reverse it because there are no such options in it.
If your Wallet ID is lost then it is lost forever as it is not possible to recover it. In such a situation, whatever money you have in your wallet is lost forever.
Cryptocurrency is new and people don’t know much about it yet. Without log proper knowledge, you can sink your money by investing in it.
People do not know how to mine cryptocurrency and thus they open the way for hackers.
Not many websites and companies accept digital currency yet. Its use is legal in many countries. Hence it is not ideal for your everyday use.
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