Top 5 things to know about cryptocurrency
Regardless of the popularity of cryptocurrency, it can be seen that there is still considerable confusion in terms of its viability and functionality. Here’s the top 5 things that you must know about, so that you have a clear cut idea regarding cryptocurrency, and how it really works.
Cryptocurrency has recently taken the world by storm, and the exponential growth in cryptocurrency related trades across the globe speaks volumes about the possible dependence on cryptocurrency as a new medium of exchange for transactions across the globe. However, regardless of the relative popularity of cryptocurrency as a medium of exchange, it can be seen that there is still considerable confusion regarding cryptocurrency in terms of its viability and functionality. Here’s a set of top 5 things that you must know about cryptocurrency, so that you have a clear cut idea regarding cryptocurrency, and how it really works.
- What is Cryptocurrency?
Cryptocurrency is referred to as a form of payment that is exchanged online for goods and services. They work using a technology referred to as block chain. Block chain is considered to be a decentralized technology that is spread across numerous computers that manages and records transactions. The main USP of this technology is the security that is involved with it. - What are the options to choose from? What are they worth?
There are more than 6700 different cryptocurrencies that are traded publicly as of this writings. Cryptocurrencies continue to proliferate, and raise money via initial coin offerings, also called as ICOs. As of April 2021, the total worth of all the cryptocurrencies combined amounted to $2.2 trillion. - Are cryptocurrencies safe to rely on?
Cryptocurrencies cannot simply be defined as a fad. The recent trajectory of increasing trading volume of cryptocurrencies is proof of the fact that cryptocurrency is here to stay. Safety tends to be one of the most important feature of cryptocurrencies that have resulted the rapid acceleration of popularity of cryptocurrencies. A lot of cryptocurrency users really like the fact that cryptocurrency removes central banks from managing the money supply, because over time these banks tend to reduce the value of money via inflation. In the same manner, the fact that block chain uses a decentralized processing system and recording system, it is referred to be more secure as compared to traditional payment systems. - Are cryptocurrencies considered to be a good investment?
Cryptocurrencies are considered to be speculative investments as opposed to being regarded as real investments. This is because of the fact that cryptocurrencies generate no cash flow, and therefore, the only way investors can make profit is for the inherent value of the cryptocurrency to increase in value. Therefore, because of the fact that they do not continually generate variable cash flows (let alone, at an increased trajectory), the only way investors can earn is via capital appreciation. - What are the most common, popular or profitable cryptocurrencies?
Regardless of the fact that there are numerous categories of profitable cryptocurrencies that are prevalent on the market, it can be seen that there are some that are more popular as compared to other because of their exponential growth in terms of value. Factually, it can be seen that Bitcoin continues to be highly popular with a market capitalization as high as $1.2 Trillion. Followed by Bitcoin, Ethereum, Cardano, and XRP continue to be the most popular but I’d like to add Terra-Luna which is my personal favorite.
