Cryptocurrency has really taken the world by storm. Just like real currencies, cryptocurrencies allows you to buy goods and services.
Despite a lot of talk about it and a significant number of investments made, not everyone understands how it really works.
So, what is cryptocurrency?
By definition, it’s a digital currency in which encryption methods are used to control the generation of currency units while confirming the exchange of assets. Some of the common cryptocurrencies include Bitcoin, Litecoin, Peercoin, Primecoin, Ripplecoin, Ethereum, and Namecoin.
All You Need to Know about Cryptocurrencies
1. Anyone Can Make Their Own Cryptocurrency
You can write a blockchain and use it to create your own digital currency. All you need is time, some money, and a team of people who can to code.
However, the low barrier entry to cryptocurrency possesses a great threat to blockchain and the value of the already well-established digital currencies.
2. There are more than 1300 Cryptocurrencies
Bitcoin is not the only cryptocurrency like many people think. It, however, dominates the crypto market by taking about 54% of the market value of all cryptocurrencies in the world – that’s equivalent to roughly $589billion.
In fact, Bitcoin is so popular that it’s sometimes used interchangeably with cryptocurrency, which is totally wrong. There are over 1300 cryptocurrencies, and they keep increasing year after year.
3. Cryptocurrencies are Extraordinarily Volatile
Cryptocurrency prices are really volatile. In one minute their values could be going off the roof and in the next one, you could see your money go down the drain without any warning.
The volatility can be attributed to the fact that digital currencies are exchanged in numerous cryptocurrency markets all over the world rather than in a single central exchange.
4. You Can Earn Cryptocurrency Through Mining
Cryptocurrency mining is simply using highly-powered computers to verify and record cryptocurrency transactions to a public ledger. Miners are rewarded with cryptocurrencies for every successful transaction.
Even though mining requires powerful hardware and uses a lot of energy, it is extremely rewarding.
5. Cryptocurrencies are Banned In some Countries
Cryptocurrency might be creating a buzz all over the world, but they are not accepted by some government authorities because of its unregulated nature. Some of the countries that have openly banned cryptocurrency include Morocco, Bangladesh, Bolivia, and Nepal.
So, confirm with the relevant authorities in your country before you start mining cryptocurrency.
6. Cryptocurrencies Can be Used as Cash
Cryptocurrencies can not only be used to buy items from online sites like Amazon and Apple Store, but other businesses are now accepting digital currencies as a form of payment. From buying a house to dining at a restaurant, you can now use cryptocurrencies for a lot of things.
7. Cryptocurrencies are Decentralized
Cryptocurrencies are not owned, regulated or controlled by any central government. This means that no one can steal or hack its data since there is no particular place where data is stored. This characteristic makes cryptocurrencies more secure and reliable than other currencies.
8. The Founder of Cryptocurrencies is Not Known
Digital currency was actualized in 2009 when the computer code was first introduced. But the idea itself can be traced back up to three decades ago.
Satoshi Nikamoto is the legend believed to be behind the creation of Bitcoin (the most popular cryptocurrency), but there’s no proof that he is the brains behind cryptocurrency. This is because it’s a platform where anyone can create their currency, mine, and get rewarded for it.
9. There Will Be Over 200 Million Active Cryptocurrency Users By 2024
According to experts, Bitcoin users are expected to hit an all-time high of 200 million by 2024. In March 2017, it was revealed that active Bitcoin users were about 5.8 million. Since then, cryptocurrency price and its market valuation have grown at a rapid rate. From these projections, we can expect more from cryptocurrency in the years to come.
10. Not Everyone is a Cryptocurrency Believer
Not everyone is in the idea of using cryptocurrency. Investment mogul Warren Buffett once stated that cryptocurrencies are nothing more than a channel of transmitting money and they lack real asset base value. JP Morgan Chase CEO, Jamie Dimon, also referred to cryptocurrency as fraud, claiming that it won’t end well for the active users.
The Future of Cryptocurrencies is Bright!
Despite its unregulated nature and volatility, the future of cryptocurrencies is bright. The world is getting more technologically advanced each and every day. And there is no technological advancement that’s better than cryptocurrency. Nobody wants to carry cash anymore!