Cryptocurrency: What is it? [Complete Beginner’s Guide]

What is Cryptocurrency“We always think, we’d be happier if we just had a little bit more money”. Money can give us the power to make a difference in lives and nurture our relationships. Most of the people look at their bank accounts with great attention and assess how much money they have to spend or to invest.

In this modern era, everyone is connected virtually to each other through the internet.  When technology comes to the financial field, it always put the humankind in a hesitant state. Financial services companies offer digital currency facilities to make transactions faster and secure. This virtual money plays a vital role in this digital world.

The Most popular and widely used form of digital money is cryptocurrency. Cryptocurrency is a new word for many people.

Here, in this article, we’ll explain to you what is cryptocurrency? and how it works?

What is Cryptocurrency?

A digital or virtual currency, based on encryption techniques which are used to regulate the generation of currency and verify the transfer of funds. It’s designed to use as a medium of exchange working on cryptography. Cryptography uses the special codes which make it more secure.

Cryptocurrency only exists on digital devices such as computers and smartphones. it’s pseudonymous which means you don’t have any need to give personal information to use cryptocurrency.

What is Cryptocurrency

Cryptocurrencies are passed from person to person online without borders.

The Origin of Cryptocurrency

In the 90’s, when people were struggling to understand the Internet Many efforts were made to make digital currency. But there were many different reasons for their failures, such as security issues and fraud. Due to failures, the creation of a digital cash system was seen as a lost cause for a long while.

In early 2009, an anonymous programmer or a group of programmers under an alias Satoshi Nakamoto introduced the first fully decentralized digital cash system. It’s completely decentralized which means there are no servers involved and no controlling authority.

The most important issues with that payment network are double-spending. it’s a fraudulent technique of spending the same amount twice due to the decentralized network. In this, every single participant needs to control his funds with all his personal details. This is done through the Blockchain technology.

What is Blockchain?

A group of information called block and a database of every transaction that has ever happened using a particular cryptocurrency is known as Blockchain. All cryptocurrencies use distributed ledger technology(DLT) to remove third parties from DLT shared database. Once you added a information to the blockchain, it can’t be deleted or changed.

Blockchain working

How Does Cryptocurrency Work?

Dealing with cryptocurrencies, you need to understand the mechanism of cryptocurrency. Cryptocurrency isn’t like a fiat currency. it is only exists on the blockchain. Users access their cryptocurrency using encrypted codes called public and private keys. These keys are kept in wallets which can be online, offline, software, hardware or even paper. Some wallets are free of cast while others are more expensive. So you should use different kinds of cryptocurrency wallets.

A cryptocurrency like Bitcoin is a network of peers which stored the complete history of all transactions.

For example, a transaction file that says “Ross gives X Bitcoin to chandler” signed by ross’s private key. After signed, this transaction is broadcasted from one peer to every other peer in the network. this is called basic p2p technology.

working of cryptocurrency

Now you have to wait for the confirmation. In cryptocurrencies, confirmation is a key step or you can say that cryptocurrencies are all about confirmation. Your transaction is pending until the confirmation. These transactions are confirmed by the miners. Let’s see what is miners in cryptocurrency?

What is Mining in Cryptocurrency?

Cryptocurrency mining is more like accounting. Miners are nodes in the network that perform transaction tasks. Only miners are responsible for transaction confirmation. After confirmation, it comes a part of blockchain and rewarded with new Bitcoin. That’s why it is known as mining.

Now you know What is cryptocurrency and how does it work. Next, I’ll tell you what can you do with your cryptocurrency?

What can you do with cryptocurrency?

  • Purchase goods:

These days, there are a lot of online and offline places that accept cryptocoins as the form of payment. Cryptocoin like Bitcoin can be used to pay for flights, jewelry,hotels, computer parts, and even a college degree.

However, some Gift card selling websites like Gift Off which accepts around 20 different cryptocoins. Through these gift cards, you can easily buy anything with a cryptocurrency.

  • Accept as business payment:

If you are handling own business and looking for new customers that can accept cryptocurrencies as a form of payment, then there may be a solution for you.

These days, there are a number of crypto-ATMs located around the world. According to Coin ATM Radar almost 1,800 ATMs are available in 58 countries. Also, you can use different payment services in cryptocurrencies such as CoinPayments, CoinGate, and BitPay.

  • Invest:

Over the past few years, the cryptocurrency market is growing fast and people are starting to see its potential. There are many people who believe that cryptocurrencies are the hottest investment opportunity. Popular online marketplaces allow investors to use several cryptocurrencies such as Bitcoin, Ethereum, Avesta and so on.

However, Bitcoin is the most popular and valuable digital currency. And last year in December 2017 one BTC was valued at $17,000. Cryptocurrencies are high-risk investments because their market value fluctuates like no other asset’s.

Most Popular cryptocurrencies with market cap

Name Market Cap Price Volume Circulating Supply Change (24hrs)
Bitcoin $110,488,917,656 USD $6,358.95 USD $4,376,184,815 USD 17,375,337 BTC -0.19%
Ethereum $21,306,770,972 USD $206.48 USD $1,560,247,405 USD 103,190,759 ETH -1.13%
Bitcoin Cash $9,081,598,224 USD $520.22 USD $981,580,713 USD 17,457,300 BCH 2.19%
Ripple $20,460,301,685 USD $0.508893 USD $453,078,818 USD 40,205,508,733 XRP -1.68%
Litecoin $2,963,338,404 USD $50.10 USD $328,759,045 USD 59,151,488 LTC -1.16%
Dash $1,351,571,838 USD $160.08 USD $140,610,331 USD 8,443,159 DASH -1.18 %
NEO $990,833,068 USD $15.24 USD $130,542,680 USD 65,000,000 NEO -1.66%
NEM $955,606,638 USD $0.106179 USD $33,324,261 USD 8,999,999,999 XEM -1.66%
Monero $1,729,792,676 USD $104.40 USD $15,872,137 USD 16,568,310 XMR -1.35%
Ethereum Classic $978,252,514 USD $9.23 USD $133,920,603 USD 106,019,671 ETC 1.15%
IOTA $1,376,593,414 USD $0.495261 USD $9,376,468 USD 2,779,530,283 MIOTA -0.20%
Qtum $328,552,343 USD $3.69 USD $106,782,123 USD 89,034,588 QTUM -1.95%

How to buy cryptocurrency?

When it comes to Bitcoin, there are currently almost 1,800 Bitcoin ATMs available in 58 countries. Moreover, you can purchase from investment trusts, cryptocurrency exchange and using BTC gift cards. There are a lot of exchanges where you can buy or face-to-face trade is also a popular way to acquire cryptocurrencies.

Wrapping Things Up

We hope our guide helped you with what is cryptocurrency and how does it work!Often, we concluded various crypto-coins with market cap.

If you have any question or query with this article, let us know in the comments section provided below.

 

3 comments on “Cryptocurrency: What is it? [Complete Beginner’s Guide]

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