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What is Cryptocurrency? How Bitcoin Works and How to Invest in
Crypto?
Cryptocurrency is popular investment in digital world to grow your
wealth. In this article, we know about cryptocurrency and How to
Invest in Cryptocurrency.
Cryptocurrency is type of digital currency that uses cryptography.
Cryptocurrency are decentralised, means which are not controlled
by any government and any other banks. Cryptocurrency uses
Blockchain Technology.
Cryptocurrency and bitcoin
Table of Contents
What is Bitcoin?
How Cryptocurrency Works?
Benefits of Cryptocurrency :
What are Different Types of Cryptocurrency
How to Invest in Cryptocurrency
Demerits of Cryptocurrency
What is Bitcoin?
Bitcoin is one type of digital currency that works on cryptocurrency
principle. This Bitcoin is created in 2009 by Satashi Nakamoto.
Bitcoin is decentralised means that not controlled by any
government or any other bank institution.
Bitcoin works on Blockchain Technology. That technology means
digital lender book, having all the transactions records stored in
1,000 of computers with a node point. Bitcoin makes secure access
and transparent system of digital currency.
How Cryptocurrency Works?
Cryptocurrency works on Blockchain Technology, Like digital wallet
cryptocurrency also having wallet through that you can invest in
cryptocurrency. The process of buying and selling cryptocurrency
and introducing of new coin is called Mining. For Mining they use
Super Computers which gives complex puzzles to solve.
Bitcoin is restricted to 21 Million Bitcoins only as of now.
Benefits of Cryptocurrency :
Decentralization : Cryptocurrency are not controlled by any
Government authorities or Bank, Hence cryptocurrency are
decentralised. Hence no single body owns the cryptocurrency and
managed by computers.
Security : Cryptocurrency makes secure transactions and its difficult
for any hackers to access. Your wallet is protected by key and you
also have access to it.
Accessibility : Cryptocurrency is easy to access, anyone with proper
Internet connection and a smartphone is enough.
Transparency : All Cryptocurrency are recorded in ledger card called
Blockchain. This transparency makes anyone can verify
transactions, reduce the risk of fraud and corruption.
What are Different Types of Cryptocurrency
Bitcoin – It is often referred to digital gold and used as peer to peer
Transactions.
Ethereum – Ether is cryptocurrency used to facilitate transactions
on Ethereum network.
Ripple – Ripple is designed for real time cross border transaction,
enables fast and low cost international transfers.
Litecoin- It is considered as Silver for Peer to Peer online transaction
which enables faster transactions.
Cardano – Its focus on sustainability, scalability and
Interoperability.
Stellar – It’s aims to make financial transactions more accessible
and affordable for everyone.
Dogecoin – Its often used for tipping and small transactions.
Binance coin – It is used for trading fees and found usable in many
DeFi projects.
Bitcoin
How to Invest in Cryptocurrency
Investment through Cryptocurrency is hot topic nowadays, but with
right knowledge and approach anyone can started.
Understand the Basics – Before diving into the world of
Cryptocurrency, you have to understand about what is
cryptocurrency and how it works. It operates independently, not
depend on any Government or bank authorities.
Do Your Research – Start by Researching different crypto
currencies. Actually, Bitcoin and Ethereum known, There are
thousands of coin with Unique Features.
Choose a Cryptocurrency Exchange – To buy cryptocurrency you
need a Cryptocurrency Exchange. Coinbase, Binance and Kraken are
some known Exchanges.
Create Wallet – A Cryptocurrency wallet is digital bank account for
other coins.
Start Small – Investing in cryptocurrency is quite Risky, its good
idea to start with small amount that tou afford the loss..
Diversity Your Portfolio – Don’t put all your eggs in single basket.
Diversifying your cryptocurrency portfolio by Investing in various
coins.
Demerits of Cryptocurrency
While there are certain Advantages of Digital Currency but crypto
comes with some drawbacks.
Volatility – One of main drawbacks of Cryptocurrency is extremely
price volatility. Unlike other currencies, cryptocurrency experience
massive price variations over a short period of time.
Lack of Regulation – It is decentralized, Cryptocurrency operated in
a unregulated environment. It open door to scams, fraud and illegal
activities.
Security Concerns – Cryptocurrencies are stored in digital wallets,
and their security depends on the users themselves. If you’re not
careful with your wallet’s private keys, you could lose your
cryptocurrency due to theft or hacking.