A Beginners Guide to Cryptocurrency

Cryptocurrencies are one form of digital currency that makes use of blockchain technology for the transfer of value from one person to another. An unknown entity created this cryptocurrency to facilitate the peer to peer transfer of money. Unlike the fiat currency, this form of digital money not controlled by a centralized agency. The cryptocurrency revolution saw the emergence of a new form of currency that facilitated the monetary transactions at decreased costs. Lately, there is a precipitous rise in the value of these hybrid currencies. Are you interested in investing the money that fetches you a significant gain?Then, read this writing piece to understand the basics of cryptocurrency.

The central monetary agency of any country doesn't create the cryptocurrency. Instead, it is created using a secured technology called blockchain technology through encryption. In other words, the cryptocurrency mined by computer experts called miners. All the transactions recorded in a secured ledger that is unalterable. These coins can be used as a medium of exchange by any person or organization even though miners create them.

Having understood what is a cryptocurrency and how is it created now, let us understand some of the cryptocurrencies that took the market by a storm. It would be surprising to know that since inception in 2009, there are, now 1394 types of cryptocurrencies circulated in the digital currency market. Let me try to explain five major types of these coins that are snapped up by the buyers to earn a fortune.

BITCOIN:

This is the most preferred form of e currency that has a present market capitalization of 160 billion US dollars and launched during the year 2009. The value of Bitcoin today is 6,337 US dollars. The Bitcoins you purchase stored in a digital wallet. The password is the only way to access these digital coins. If you forget your password, you lose the coins permanently.

Ethereum:

Since inception, Bitcoin is the king of other coins. But, Of late, Ethereum is gaining the attention of lots of investors. In addition to acting as a medium of exchange, it allows you to enter into smart contracts between individuals. The parties enter into a contract after writing down the terms and conditions on a piece of paper using a machine called Ether. The present market capitalization of Ethereum has crossed 1 Billion US dollars.

Lite Coin:

It works exactly similar to a Bitcoin. The only difference between the two is that Bitcoin takes 10 minutes to verify a transaction and Lite coin takes 2 minutes to make the process. This coin also uses blockchain technology to complete and secure a transaction.

Zcash:

It also resembles Bitcoin in every sense except for the fact that Zcash makes not only the identity but also all details unknown to the public.

Monero:

It is a virtual bank that allows you to withdraw and use your hard earned money without being tracked by anyone except for you. It is cryptocurrency that uses bock chain technology to allow the transaction happen between agreed individuals whose identity not revealed.

Advantageous of Cryptocurrency:

The Sudden surge in the value of investment:

The main reason why the investors scurry to park almost all of their savings in cryptocurrency is that of the increase in the value of these coins. The value of 1 Bitcoin was 1000 dollars during 2013. There is a possibility that it will grow up to 45,000 US dollars in the recent future. You may have a sudden stroke of fortune if you plow your money into this market now.

They have gained the confidence of investors:

Even though they are dodgy investments, many governments have recently started backing this kind of investments because of the convenience to handle and the growth potential these coins have. The US is one of the countries where these coins traded vigorously.

These are liquid investments:

These other coins can be bought and sold the moment you want to buy or sell them. In other words, they are assets that can be bought and sold in a liquid market.

Disadvantageous of cryptocurrency:

Volatile Market:

There is a possibility of a stomach-churning drop in the value of these currencies if hackers get into the system destroying the working of blockchain technology. Even though the other coin market has seen many such incidents happening, the sudden drop in the value of e-coins is a figment of the imagination.

Remember Password:

Since your digital asset stored on the internet, you have to remember the password. Failing to recall the secret code can cost you money.

Uncertainty about the future:

It is true that these coins have slowly gained the recognition of many economies, the future is still uncertain. There can be an unfettered rise in the value, or these coins can be wiped out entirely in the years to come.