What Is Digital Currency And Hidden Facts Behind Cryptocurrency
Often times it is seen that people get confused in comprehending what digital currency actually is. One of the most popular digital currencies that are present in the world is known to be crypto-currency. This type of currency has taken the world by a shock as it has gained the interest of people in a very little period. This type of digital currency is considered to be one of the most prominent currencies which are available to the public.
What is Cryptocurrency?
This is the first question which arises for people when they hear about digital currency. Crypto-currency is basically a form of digital currency which can be used as a medium of exchange. This currency is decentralized meaning that it does not have a governing body. In simpler words it can be said that when you are conducting a transaction of any sort there is a third party involved which is the government, on the other hand, crypto-currency does not involve any type of the third person thus making it faster and reliable.
There are various organizations which use this type of currency as a medium of exchange so that they can sell their products to the customers. There are also other organizations which take crypto-currency for a social cause such as Gobitage. This organization uses Jings (a type of crypto-currency) to help the disabled part of the society. These organizations raise money through their initial coin offering.
How many Cryptocurrencies?
One insane fact that is worth to be noted down is that there are more than 1600 crypto-currencies which are present in the world and new ones are being released mostly every year. Bitcoin is probably the most known currency in the digital coin market. The Bitcoin exchange rate is about $9780 per coin, with its value fluctuating according to the demand. This shows how much crypto-currency has evolved and how much interest it has gained in the public. There are new coins such as Jings coin which may also gain popularity in the coming future.
Another interesting fact that can be seen through this is that as crypto-currency is becoming popular, people have started to see it as the future currency that will take over. This is because the world is becoming cash-free as most transactions are done online and this digital currency can become a medium of exchange.
How should you invest in Cryptocurrencies?
The next question that is asked right after this is that where to buy a crypto-currency? As there are many crypto-currencies available in the market it becomes difficult on what is the best crypto-currency to invest in. The first thing would be to do is check the crypto-currency price list in which it will be found out on what the prices are and if there are any new crypto-currency release which offers a better investment deal rather than the others.
The future of crypto-currency is considered to be good as more people are demanding for it. It would be a good idea to invest in new and upcoming coins as they would not be sold for such a high rate and would also gain momentum easily due to the interest of the people in it. This often times confuses people on which crypto-currency to invest in.
‘Keys’ in Cryptocurrencies
The next part that comes in understanding this digital currency is how safe is it. Most people do not know that the transactions done in this currency are well-thought-out so that the customer’s information is fully protected. When you are buying or selling a coin then there are two keys which need to be maintained, one is the public key while the other is the private key. Both of these keys will make sure that whatever transaction which is being done is safe and secure. The private key is available so that you can access your wallet while the public is available to you so that the buying and selling of coins can be done.
Both of these keys are a long number of Bits (Algorithms) which are very hard to hack as their encryption code is very strong. One hidden fact that can be noticed here is that you should take care of your private key or else if you lose it then all of your crypto-currency will be lost. The interesting fact that can be seen form this is that there is no third party that one can go to if you lose your key to this process of crypto-currency should not be taken lightly and proper research should be done before any type of investment.
The use of ‘Wallets’ in Cryptocurrency
Another hidden fact of crypto-currency is that there are not actual coins that are being traded but their information which is being sent to one another. Know you might ask on where all of this information is stored. For this, there are wallets which are available for various crypto-currencies which are available in the market.
The role of a wallet comes into play when a digital currency exchange occurs. The transaction records which are occurring need to be addressed to the wallet which can be done by seeing what the public key is of the person. For example, if I want to sell my Bitcoin to another person than I would have to have access to their public key which hence would store that transaction in both our wallets. But it should be noted that the wallets can only be accessed by your private key.
The blockchain technology needs to be understood by you if you wish to invest in a new crypto-currency release or an old one. The blockchain can be described as a ledger that is maintained or the transactions which take place. Whenever a new transaction takes place a new block is created. These blocks cannot be changed or tampered with. The information of the transactions stored in the blocks can be seen by the public but cannot be changed as the blockchain technology uses cryptography. Now all of the various crypto-currencies use this technology to make sure all of the transactions are safe and no fraud is being committed.
What is the Cryptocurrency mining process?
Unlike the mining that you are thinking of crypto-currency also involves mining. In this, it is seen that the transactions which are being done need to be verified by someone and this is the jobs for the miners. Though mining of crypto-currency may be a different business altogether it plays a crucial role in the understanding of what digital currency is. As the whole process is decentralized, these miners help in making the transactions successful. It is to be noted that the miners cannot hack the system or make fraud transactions. The benefits that are achieved by them for doing this, is that they receive coins.
Digital currency v/s Cryptocurrency
Though it can be said that crypto-currency is a part of digital currency but there are some factors which bring a difference in the two of them.
|Structure||Centralized: Governing authority can be either the government or any other organization.||Decentralized: There is no governing body|
|Transparency||All information is private and cannot be accessed by everyone.||All of the information related to transactions is seen by everyone and it cannot be hindered with|
|Legal Aspects||There are a lot of rules and regulations regarding digital currencies.||There are no legal aspects regarding this type of currency as of now.|
Hidden and Interesting facts about Crypto-currency
These hidden facts are bound to catch your attention as they have some aspects which will leave you amazed.
- Nobody really knows who was behind the creation of crypto-currency as only a name has appeared which is Satoshi Nakamoto. There is no other information that can be found about this person other than his name.
- There is no chance of refund of any type while using crypto-currency. Once you send an amount it cannot be reimbursed back to you. So full concentration is required while trading of this crypto-currency.
- There are at least more than 200 crypto-currency exchanges which are present in the crypto-currency market capitalization also known as CoinMarketCap
- It is not known by many but Bitcoin has helped to establish Blockchain technology and Coinstream
- JINGS coin is considered to be one of the best new crypto-currencies which is available in the market.
- Most of the countries do not allow crypto-currency as a medium of exchange as they think it will cause a disturbance in their economy. Also, financial analysts are afraid that it may take away their jobs.
- It takes a whole lot of equipment and electrical power to have proper mining set up.
- Facebook has developed its own crypto-currency known as Libra which is on the news.
- Blockchain Technology was long forgotten but came back into existence by the use of crypto-currency.
By now it is understood on what is digital currency so that you can start to invest in it.
I hope you have found it knowledgeable and understood what is digital currency means.
Please feel free to share further queries about digital or cryptocurrency market.