What is cryptocurrency – All you should know about


What is cryptocurrency

Ever played Subway Surfers? If yes, you definitely must have the idea of earning coins by accomplishing different tasks. That is the thing within a game. You play a game, you complete missions within the game, you earn coins and then you utilize those coins within the game. Cryptocurrency is almost like that kind of a thing. Difference is, that for now, as it is something new, you buy the coin; digital currency, and you can utilize that to buy your stuff. May be in future, you work and get the wages in form of digital currency, rather than, paper currency or metal currency.

How It Works?

Basically, right now it works as you buy a coin of some particular price and then you can use it to buy other stuff or you can sale it for more money like an investment. Investment is why, because it is based on an open market and the prices fluctuate. Some time it is of low price and then it gets higher and then comes to low and it works like this. But ultimately, this is too risky to rely on. You can collect coins in your wallet, which works just like a bank account. It started with normal price and then raised to million dollars.

Cryptocurrency Mining

It is a process in which, in which persons individually or in form of a business having high-powered computer systems compute with each other for solving extremely complicated mathematical problems to design a protected transaction system.

Different types of cryptocurrencies

  • Bitcoin
  • Litecoin
  • Ethereum
  • Zcash
  • Dash
  • Ripple
  • Monero

Source: investopedia.com

Benefits and Risks

There are a number of benefits of crytpocurrency. It has easy access as everyone can use this. Making payments is quite easy and rapid with the help of crytpocurrency. It provides full privacy as one does not have to show up his/her identity if he/she do not want to. There is no third party included in it and international dealings can become quite easy and valuable.

But there are so many risks in this as it is difficult to understand. People due to having lack of knowledge, invest improperly and loose their money. Cryptocurrencies are quite new and have came with the learning curve, people are unaware of its technical complexities and hence they open themselves to the hackers.

There are only some countries who have legalized the digital currency otherwise there are just a few stores, and sites who accept cryptocurrency. As it is a decentralized network game, there is not security of your money. There is no server of central hub that manage all transactions and database so it comes on to the end users to maintain that by themselves. One can loose the wallet by forgetting the password or loosing the device having the wallet on as again it do not have any server.

There is no way you can reverse your money you mistakenly sent to someone. All you can do is to ask that person to do this for you, otherwise you are in lose. Another limitation it has is the way it is designed, it has a limit of transactions at a time which limit its acceptance on wide scale.

Malware or data loss can cause the loss of the cryptocurrency. Once one lose a wallet, that currency is gone forever with no way to get it back. If someone else were to find it, they won’t be able to use it either.

Who accepts cryptocurrencies

Mostly, these are used for investments but there are a number of items you can buy using cryptocurrency.

  • Online Travel Sites. Expedia and CheapAir.com both accept bitcoins
  • Small businesses and internet-based business around the globe. The internet based services accept Bitcoin
  • Shopify and Square. These platforms let small business accept crypto
  • Many websites including WordPress.com, Newegg.com, Etsy.com, and Overstock.com accept crypto. The founder of overstock.com is a big player in the crypto space. He wisely realized its potential early, and overstock.com has been accepting for a while
  • Virgin Galactic lets you use Bitcoins to buy your way into space
  • Steam (the PC gaming service) accepts crypto
  • Guns at Central Texas Gun Works accepts Bitcoin
  • Gift Cards. eGifter lets you use Bitcoin
  • TV. Dish partnered with Coinbase and accepted Bitcoin
  • Gold at JM Bullion accepts crypto
  • Clothes. Bitgear accepts Bitcoin

Source: CryptoCurrency Facts

Critics

One of the biggest criticism cryptocurrency received is that they are trying to be something, they are not. Afterall, none of them is as readily available as the usual currency for day-to-day use.

“Would you be willing to put bitcoin in your pocket and leave for a one-year trip, knowing you’re going to survive?” Aswath Damodaran, professor of finance at the Stern School of Business at New York University, asked during a CNBC interview last fall. “We’re nowhere near that comfort.”

“Right now there’s no easy way to buy, send or spend cryptocurrencies,” said Nick Saponaro, co-founder of The Divi Project, which educates people on the digital tokens.

“Those merchants who are accepting it are bullish on bitcoin,” Damodaran said. There is an irony here, he added: “The excitement of it as an investment is drowning out its ability to be a currency.”

 

 

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