Have you ever wondered what cryptocurrency is and why it became so popular in recent years? Would you like to get to know all the essential information about this topic? If you are enthusiastic about learning more about this industry, you’ve come to the right place!
The term cryptocurrency refers to a virtual or digital currency that is well-secured by cryptography. It means that people won’t be able to double-spend or counterfeit it at all. A significant number of cryptocurrencies are decentralized networks that are based on famous blockchain technology.
For those who are still uncertain about blockchain technology, think of it as a distributed ledger enforced by a disparate network of numerous computers worldwide. Cryptocurrencies are unique because any central authority doesn’t issue them, and they are entirely immune to manipulation and government interference.
What is cryptocurrency trading?
Crypto enthusiasts are eager to find all the valuable information about the cryptocurrency exchange to understand the whole process better. In short, cryptocurrency trading represents a specific business that gives the ability to customers to trade digital currencies or cryptocurrencies for various other assets.
These assets could be conventional fiat money or another sort of digital currency, for example. It is essential to understand that exchanges may accept wire transfers and credit card payments in exchange for cryptocurrencies or digital currencies.
Furthermore, cryptocurrency trading is also considered an exceptional market maker that is, most usually, taking the bid-ask spreads like transaction commissions to compensate for its service. It can also be used as a matching platform in the way of charging fees.
Learn what are the most common types of cryptocurrency
Once you have understood the concept of cryptocurrency trading, it is essential to learn the most common types of cryptocurrency lately. What happened to be the first cryptocurrency ever was a famous Bitcoin. To this day, it remains the most valuable one among thousands of other currencies that have been built from scratch or even as clones of forks of Bitcoin.
A brief history of Bitcoin
Bitcoin was developed in 2009 by a group or individual with the pseudonym “Satoshi Nakamoto”. As of November in 2021, the world was rich with an incredible 18.8 million bitcoins, with a market cap of approximately $1.2 trillion.
This figure is updated almost daily. However, it’s essential to keep in mind that only 21 million bitcoins are predestined to exist, preventing manipulation and inflation, as well.
Other famous cryptocurrencies
Besides the famous Bitcoin, there are also other essential cryptocurrencies known as the “altcoin”, which are spawned by the success of the most popular one. These “altcoins” are Ethereum, Litecoin, EOS, and Cardano.
Cryptocurrency main advantages and disadvantages
To understand cryptocurrencies better, it is crucial to know their main advantages and disadvantages. When it comes to all the benefits of cryptocurrencies, we would like to point out the promise of making a transfer between two parties easy and secure, without any necessity for a bank or a credit card company.
Transfers are secured by utilizing both public and private keys and different kinds of incentive systems. On the other hand, speaking of cryptocurrency disadvantages, its semi-anonymous nature makes it perfect for tax evasion and money laundering activities.
Despite these disadvantages, the advocates of cryptocurrencies claim that their anonymity is precious since the privacy benefits include protection for activists and whistleblowers currently living under repressive regimes.
What is the point of cryptocurrency?
In conclusion, we want to emphasize the real essence and point of cryptocurrencies. Even though there isn’t a universal answer to this question, here are some examples that most experts agreed on:
- Great potential for lowering transaction costs by streamlining payment processing.
- Utilizing it in online voting and crowdfunding.