What is Cryptocurrency? And some amazing facts about cryptocurrency that everyone must know.

 

In today’s era, online transactions and online trading have become a major part of our life. People earlier were willing to invest their money in some assets. But nowadays, people intend to invest their money in digital currency. Cryptocurrency is the most trending digital currency in the world today. After the COVID-19 attack, the world’s currency is reportedly devaluating. Compared to the Dollar currency, the others country currencies are devaluating. And investments in the Equity market are at peaks and Real Estate has no good returns. So the demand for cryptocurrency has started increasing.

 

So what exactly is Cryptocurrency?

In recent times everyone wants to know and talk about cryptocurrency. But no one exactly knows about it and how they work. So what exactly is cryptocurrency? It is the digital currency or the virtual currency that is to be a medium for exchange. It also uses Cryptography to work the way it does. Modern currency includes paper currency and coins. Online currency like credit cards and digital wallets. And all these are in the hands of Banks and the Government. But Cryptocurrency is independent of Banks and Government. 

 

When you hear about cryptocurrency. You may most raise the questions like what are the types of Cryptocurrency? Why is cryptocurrency so special? What is the future of digital currency? What are the features of Cryptocurrency? What is the best Cryptocurrency to invest in 2021? 

 

Types of Cryptocurrency

As of 2018, there were more than 1600 Cryptocurrencies available. By today about 7,600 Cryptocurrencies are existing. And a new Cryptocurrency crops up every single day. Considering the current growth there may increase even more in the coming years. The most popular coins in the earlier times were Bitcoin, Litecoin, Ethereum, and Z-cash. And today the most common and popular Cryptocurrencies in 2021 are

 

· Bitcoin(BTC)

 

· Bitcoin cash(BCH)

 

· Litecoin(LTC)

 

· Ethereum(ETH)

 

· Ripple(XRP)

 

· Stellar(XLM)

 

· NEO

 

· Cardano(ADA)

 

· IOTA

 

Features of Cryptocurrency?

Some of the features of Cryptocurrency are:

 

• There is a limit to how many units certain Cryptocurrency can exit. For example, in Bitcoin, this limit exits at 21 million. It means after this limit, they cannot produce more bitcoins.

 

• You can verify the transfer of funds. For example, bitcoin uses hashing algorithms. The algorithm makes it easy to determine whether the transaction is valid or not.

 

• The cryptocurrencies work independently of the bank or the central authority. They work in a decentralized manner.

 

• To add up new units, we need to meet certain conditions. For example, consider Bitcoin. Only after adding a block to the blockchain, the minor will get bitcoins. And this is the only way to generate new bitcoins.

 

Why is Cryptocurrency so special?

 

There are little to no transaction costs. Suppose you use a digital wallet. You know that if you are transferring money from your wallet to your bank account, you will lose some money. By Cryptocurrency, you’ll have 24/7 access to your money, unlike banks. And there is no limit to your purchases and withdrawals.

 

It provides freedom for anyone to use it. For example, if you are setting up an account in your bank, you need to do some paperwork and documentation. Using cryptocurrencies, one can avoid all these processes. And the international transactions are faster. The wired transactions take about half a day to transfer the money from one place to another. Where Cryptocurrencies take seconds or minutes to transfer.

 

Future of digital currency?

 

Consider an online transaction. Let say the transaction was successful. But there are several others ways where this could have gone wrong. There may be some technical issue or the user’s account may get hacked. And that’s why the future of currency lies with cryptocurrency.

 

Cryptocurrency uses cryptography. It is a method of using encryption or decryption. The purpose of this is to secure communication in the presence of third parties' ill intent. Cryptography uses computational algorithms like SHA256. It is a hashing algorithm that a bitcoin uses. A public key is like a digital identity of the user which he shares with everyone. And a private key that acts as a digital signature of the user which he keeps hidden.

 

Whenever a person wants to transfer using cryptocurrency. The user gets authentication to confirm whether they want to transfer. It is safe from hacking. An algorithm like SHA256 has very complicated which is difficult to hack. Futurists believe that by the year 2030, cryptocurrencies would occupy 25% of the national currencies. 

 

Best cryptocurrency to invest in 2021

 

By considering the growth and market of cryptocurrencies in recent times. The best cryptocurrencies to invest in 2021 are

 

· Bitcoin (BTC)

 

· Bitcoin cash (BCH)

 

· Cosmos (ATOM)

 

· Dogecoin (DOGE)

 

· Ethereum (ETH)

 

· Compound (COMP)

 

· Polkadot (DOT)

 

These are the most successful and costly cryptocurrencies today. As they have greater returns. Many investors intended to invest some trillions of money in them.