What Is Cryptocurrency? And How Does It Work? : Are you What Is Cryptocurrency? know about it. If not then today we are going to know about What Is Cryptocurrency?. There are many types of currency in the world, through which we do transactions. When we buy any Vastu, we give some money to the shopkeeper in return, which is a kind of currency. Different currency is used in different countries in the world. However, in today’s time everything has become online, so in such a situation, we do currency transactions online.
If you live in India, then you do online money transactions. But there is also a currency, which is completely digital currency. We know this currency by the name of Cryptocurrency. Today in this article we will know about What Is Cryptocurrency?, and how to buy it, what are the advantages of cryptocurrency, and all the important information related to it. So let us first know, What Is Cryptocurrency?
What Is Cryptocurrency?
Cryptocurrency is a digital currency created by a technology similar to cryptography and using a distributed ledger system, which works by blockchain. Through this technology, the developers aimed to create such a currency, which is secure, private, traceable and decentralized for a longer period of time. When we have to pay to buy something or take a service on a large scale, then we can make payment in digital form through online money exchange. Therefore, the payment made in it is done using the Internet in the form of some wallet. This currency appears new to us, so it is the most advanced version of cashless payment, which is done in digital form.
How does Cryptocurrency work?
Cryptocurrency actually works through Blockchain. That is, a record of transactions is kept in it. Also it is monitored by Powerful Computers, which is called Cryptocurrency Mining. And by whom this mining is done, they are called miners.
When there is a transaction in Cryptocurrency. So his information is recorded in the Blockchain. That is, it is kept in a block. And the work of security and encryption of this block is done by the miners. For this they solve a cryptographic puzzle and find the proper hash (a code) for the block.
When a miner secures the block by finding the right hash. Then it is added to the Blockchain. And it is verified by other nodes (Computers) present in the network. This process is called Consensus.
If the block is confirmed to be secure in Consensus. And it is found to be correct. So the miner who secures it is given crypto coins. This is actually a reward, which is called Proof of Work.
Types of Cryptocurrencies
Whenever we talk about Cryptocurrency, or we talk about Top Cryptocurrency, the first thing that comes to our mind is Bitcoin, almost everyone knows about it, who knows a little about Cryptocurrency. Too much information. But let us tell you that apart from Bitcoin, there are many Top Cryptocurrency all over the world. You might not know about these Cryptocurrencies. So let’s know complete information about Top Cryptocurrency List –
1. Bitcoin (BTC)
Bitcoin was started in 2009 by Satoshi Nakamoto. It was the world’s first cryptocurrency, which had the most success. Many digital currencies were created even before bitcoin, but none of them became as popular as bitcoin. But Bitcoin had skyrocketed in no time. The highest bitcoin price in India has gone up to Rs 44,54,673. Although it can go even higher, its price keeps going up and down.
2. Tether (USDT)
Tether Cryptocurrency was launched in July 2014. Initially the name of this cryptocurrency was Realcoin. But later it was named Tether. Tether is a stable cryptocurrency, its value is always equal to one dollar. This currency is hosted on the Ethereum and Bitcoin blockchains. The tokens for this cryptocurrency are issued by Tether Limited, a Hong Kong company.
3. Polygon (MATIC)
Polygon Cryptocurrency was created in 2017. It is a framework to connect Blockchain Network with Protocol and Framework. The company was founded by Sandeep Nelwal, Anurag Arjun, Jayanti Kanani, and Mihailo Bjelic.
4. Cosmos (ATOM)
Cosmos Blockchain helps to connect networks with each other and to do communication and data sharing between them. Cosmos is also known as Network of Blockchain. Uses Tools and Products for Communication, Transaction and Data Sharing in the Cosmos Blockchain Network.
5. Monero (XMR)
Monero is a popular cryptocurrency, which was released in 2014. Monero is mostly used in the Dark Web. Because Monero Currency is known for its Security Fetures. Therefore this currency is also mostly used for illegal activities.
6. NameCoin (NMC)
NameCoin is a type of Cryptocurrency, it is linked to Bitcoin, it is completely Bitcoin based currency, which uses Proof of Work Algorithm. Actually Proof-of-Work (POW) proposal was issued to keep cryptocurrencies secure. Just as bitcoin is limited to 21 million coins, it is also limited to 21 million coins. NameCoin can store data in its own Blockchian Transaction Database. Its main thing is that this Censorship-Resistant Domain Name which is .bit. This is a top level domain, similar to .net and .com domains. But still ICANN (Internet Corporation For Assigned Names And Numbers) has no control of any kind on this domain.
7. Ethereum (ETH)
Ethereum (ETH) cryptocurrency was launched in 2015, it is the second largest cryptocurrency in the world. Ethereum acts as a kind of decentralized open-source blockchain. It is also known as Ether, and is the most actively used Blockchain Network in the world.
8. Litecoin (LTC)
Litecoin (LTC or ) MIT/X11 is a Peer-to-Peer Cryptocurrency. It is a type of Open Source Project. It was launched in October 2011. This cryptocurrency is almost the same as bitcoin.
9. BitTorrent (BTT)
BitTorrent Cryptocurrency is built primarily based on the Peer-to-peer File Sharing Protocol. BitTorrent was created by the Tron Foundation. The main purpose of this mudra is to facilitate the file transfer activity between the untrusting process participants. This currency is based on Blockchain Technology.
10. Peercoin (PPC)
Peercoin is a type of Proof-of-Stake Based Cryptocurrency. Which was launched in August 2012. Apart from this, it also uses peer-to-peer and proof-of-work systems. The proof-of-stake system provides new coins to the holding person in a way, which means that the share holder will get 1% of the block of all proof-of-stake. So that it is helpful in making the currency expensive in a way.
The Origin of Cryptocurrency
When the internet facility started in the world, then it was unknown to many people. Talking about the 1990s, in the beginning most people were struggling to understand the Internet. Although many people were so smart, that they were fully aware of how the internet is such a powerful tool. Such people believed that the government and corporation have got too much power over our lives. And they wanted the people of the world to have freedom by using the Internet. So these cipherpunks wanted to allow internet users to have more control over their money and information, using cryptography.
To this end, Cypherpunks created a catalog of digital cash, in which both Digicash and Cybercash were attempts to create a digital money system. But due to some shortcomings, both failed. Then after a long wait, a digital cash system i.e. digital currency was invented in 2009, which was successful. And thus the beginning of cryptocurrencies.
Cryptocurrency Markets In India
If we talk about Indian Cryptocurrency Markets, then CoinSwitch, CoinDCX, WazirX and Unocoin are the most popular Cryptocurrency Exchanges in India. With the help of which you can buy hundreds of Crypto Coins from Bitcoin to Ethereum, XRP, YFI, YFII, Doge and Tron. And you can pay in INR. WazirX is the most popular and trusted Cryptocurrency Exchange in India.
On hearing the name of cryptocurrency, only one name comes to mind – Bitcoin. But Bitcoin is not the only cryptocurrency in this world. Apart from this, there are thousands of Cryptocurrencies. Which most people don’t know about. Well, come on! Know about some popular Cryptocurrencies…
Bitcoin is the world’s first cryptocurrency, which has become so successful. It was created by Satoshi Nakamoto in 2009. Although there have been many attempts in the past regarding Digital Currencies. But could not succeed. Even Bitcoin had to struggle a lot in the beginning. But today it is the most expensive digital currency in the world. And the bitcoin price is touching the sky at the moment.
It is a decentralized open-source blockchain. Which is the second largest Cryptocurrency in the world by Coinmarket Cap. It was launched in 2015. Ethereum is the most actively used Blockchain Network in the world. It is also known as Ether.
Ripple is a Real-time Gross Settlement System and Blockchain Network. It was founded in 2012 by the American company Ripple Labs Inc. was created by. Along with cryptocurrency, it is also a Cryptocurrency Exchange.
Tether was launched in July 2014 under the name Realcoin. But on 20 November 2014 its name was changed to Tether. Since then it has been known as Tether. It is also called stablecoin. Because it was always designed to cost $1.00.
Litecoin is a peer-to-peer cryptocurrency. Which is based on an open-source cryptographical platform. It started in October 2011. Litecoin uses Scrypt instead of SHA-256 (Secure Hash Algorithm) in its Proof of Work algorithm. It also conducts transactions four times faster than Bitcoin.
Monero is a Decentralized Open-source Cryptocurrency. Which basically focuses on Privacy and Decentralization. It is quite famous for its security features. But it is mostly used to buy illegal things on the Dark Web. That is, it is the most popular cryptocurrency of the Dark Web. It was launched in 2014.
Cosmos is a network of Blockchain Networks. That is, the Network of Blockchain Networks. It is also called Internet of Blockchains. Because it works to connect Blockchain Networks and establish communication between them. Basically the purpose of Cosmos is to help in Communication, Data Sharing and Transaction between Blockchains. And for this, Cosmos has a long range of products and tools.
Peercoin is also known as PP Coin, P2P Coin, PPC and Peer to Peer Coin. It is a peer-to-peer cryptocurrency. Which is based on the Bitcoin Framework. But its energy efficiency is 100 times more than bitcoin. Also Peercoin is the first such cryptocurrency. Which uses the combination of Proof of Work and Proof of Stack. Peercoin was launched in 2012.
The BitTorrent Cryptocurrency was created by the Tron Foundation. It is a peer-to-peer file sharing protocol. Which is based on Blockchain Technology. Its basic purpose is to facilitate file transfer between untrusting process participants. With its help, users can earn BitTorrent Token (BTT). And convert them into fiat money.
Namecoin is basically based on Bitcoin. And it uses the proof-of-work algorithm. Namecoin can store data in its Blockchain Transaction Database. Its biggest feature is its Censorship-Resistant Domain Name, which is .bit. Although it is a top-level domain like .com and .net. But ICANN (Internet Corporation For Assigned Names And Numbers) has no control over it.
Advantages of Cryptocurrency
Cryptocurrency is being used a lot today. Most of the people are investing in Cryptocurrency. But a question comes in the mind of many people, what are the advantages of Cryptocurrency, so let’s know, Advantages of Cryptocurrency –
- Cryptocurrency is completely secure, because it acts as a digital currency in a way, there is no possibility of any kind of fraud here.
- You get many Digital Wallets in cryptocurrencies, due to which you can easily invest here.
- Buying and selling cryptocurrency is very easy, you can buy and sell it at any time.
- You do not need any kind of bank for cryptocurrency.
- Its most important thing is that cryptocurrencies are not controlled by any state or government.
- If you invest your money in cryptocurrencies, then you can make good profits here, although it completely depends on the market, but after many years the price of cryptocurrencies has been increasing continuously.
Disadvantages of Cryptocurrency
Just as everything has its benefits, in the same way it also has some disadvantages. Similarly, cryptocurrencies have both advantages and disadvantages. So let’s know, what are the disadvantages of cryptocurrencies –
- The biggest loss in Cryptocurrency can be to the Investor, because it is not controlled by any authority. Because of which no one knows when the cryptocurrency price will decrease and when will it increase.
- However, according to the reports of many years behind, the price of Cryptocurrency has not fallen down yet, it is increasing continuously. But still investing in it can be a risky task.
- Cryptocurrency is a type of digital currency, so here there are daily hack attacks. Although it is completely secure, it has happened once with Ethereumn Currency.
- Cryptocurrency is completely virtual currency, it does not have any kind of coin or note.
- Cryptocurrencies are mostly used for illegal activities. It is used to buy stolen Credit/Debit Cards, Drugs etc.
Are Cryptocurrencies legal?
The answer to this question can be different for each country, because cryptocurrencies are being used in many countries in the world, such as the United States of America etc. But still in some countries it is completely banned, which includes the name of China. Let us tell you that along with China, it is completely banned in our country of India as well.
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