In amidst of covid-19 lockdown there was a hype going around called a “CRYPTOCURRENCY”
So let’s know about it in detail.
We all have heard about cryptocurrency, and this question definitely comes to mind. What is cryptocurrency? Even if you know a little bit about cryptocurrency, or you don’t know anything at all, then you must have read this article till the end. In this we have talked about all the aspects of cryptocurrency in detail, so let’s know what is cryptocurrency?
What is a cryptocurrency?
It comprises two words CRYPTO which means hidden and CURRENCY which means money in short. Cryptocurrency is based on a digital algorithm which makes it digital currency. Due to this you can neither touch it, nor there’s any control of any government or any kind of bank or institution on it.
Cryptocurrency works on an electronic peer to peer system also known as Blockchain which is quite effective in transactions. Blockchain is also used to track every inch of each transaction. There are more than 4000 cryptocurrency right now Bitcoin is the most popular of them all.
Unlike others, the transactions happen only between the seller and the buyer, no other channels so there’s a chance of more profit. But there’s a possibility of unsecure transactions. However, cryptocurrency has its own security with an encryption key.
Like bitcoin, digital signature is used to secure its transactions, in which both the parties are given an encryption key which makes their transaction secure. Which is done under the supervision of a laser. Now the question must have come to your mind: what is a laser? What else works? Let’s talk about it.
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What is a laser? How does it work?
When the currency itself is unique, its ledger must also be unique, which is called a laser . The main function of the laser is to list entries in the database and to keep all transactions public and transparent. It is an automatic and self-governing which means there is no chance of any external interference in it. But it also has some drawbacks that don’t prevent the use of cryptocurrency in a wrong way.
Advantages of CryptoCurrency
Let us now know the advantages of cryptocurrency which makes it special and different from physical currency.
- As you now know that in today’s time cryptocurrency is changing the physical and old mode of transaction to a great extent. Today we can buy many things online through cryptocurrency. It is gaining the popularity that has led many companies to accept cryptocurrency today.
- Another special thing about cryptocurrency is its transparency, about which you have read above, how its records are kept with the help of a ledger. Due to which its transactions become very transparent.
- After the introduction of CryptoCurrency there’s boom in the investment sector. Stakes are high now it has shown more than 100x return in a quiet short period of time
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Disadvantages of CryptoCurrency
- Perhaps the most challenging hurdle in terms of mass adoption of alternatives like cryptocurrency is that it can be difficult to understand, especially if you are not tech-savvy. Because it is a non-government transactional financial system, it is stored via blockchain.
- There are many ways in which you can use cryptocurrencies, but most of the people using them at the moment are just using them as an investment. Which is fraud with a lot of risks and ups and downs. Sometimes it gives a lot of profit and sometimes a drastic loss.
- Due to being away from the law of the government, nowadays it is used more in illegal activities.