What is Crypto Currency
This currency is not in physical form. Rather it is in digital form. This currency is not regulated by any Central Bank. The exchange of this currency takes place over the Internet.
This is recorded in the distributor database. Like we have talked about earlier, it does not have any physical form. That is, it is not a printed currency.
Digital currency transactions take place over the Internet. So there is no cost in distribution and printing of the note. It is not regulated by any government body or any government bank?
There is no border in the transaction of digital currency. If one person is in UK and the other is sitting in Japan. So he can pay it. Provided both are on the same network. Crypto Currency however comes in the form of digital currency.
Cryptocurrencies use decentralized systems to record transactions and issues a new unit. Cryptocurrencies do not depend on banks to verify transactions. It is a peer-to-peer system, with the help of which any person can receive and send money from anywhere.
Transactions in Crypto Currency are recorded in the public ledger. Crypto Currency is stored in a digital wallet. Cryptocurrencies are decentralized and are secured by cryptography.
What is Digital Currency
But the currency of a country which is operated by an authority. If it is in digital format, then it is also called digital currency. It can be in your wallet. And you can also withdraw it from the bank. You can also exchange it in real currency. It is also called digital currency.
As in the US, the fed controls the monitor value of the dollar, together with the government and the bank. That is why it is very important to have a central authority. Which control your finance system or monetary value. Digital Currency is Electronic Cash.
However, if you are doing any transaction in digital currency or you are paying to the receiver. So banking authorities are involved in this.
Digital currency like dollar, it remains quite stable and managing them is also much easier. Dollar is a global currency. Most of the transactions in international trade are done through dollars. Because people use it in very high majority, due to which it remains stable.
However, fully digital transactions are not possible in the US. According to a survey by Wake Field Research and Commissioned by Square, 68% of business owners and 73% of consumers said that America will never be a completely cashless society.
Advantages
Cryptocurrencies are managed by the public. People who are on and using the same network. He knows all about it. And its ledger is public for all. Its biggest advantage is that, it is not managed by the Government.
Due to inflation, many currencies get depreciated. Whereas with Cryptocurrency there is no such problem. Cryptocurrency always protects you from inflation. When the demand for Bitcoins increases, so does its value.
When demand falls, its value also decreases. Otherwise, inflation does not have any effect on it. Cryptocurrency is considered the most secure. And at the same time, privacy is also very high in them.
Because Cryptocurrencies are Encrypted. It is directly related to Blockchain Technology. So decoding it is a very difficult task. It is more secure than any common digital currency. In common currency, your data is with the bank.
There is a third party involved in it. Whereas in this there is a transaction between two people and apart from this no one knows anything. You can buy cryptocurrency easily. You will easily get cryptocurrency in exchange for Pounds, Euros, Rupees, Dollars etc.
It is not like fiat currency, which is controlled by the government. Rather it is decentralized, due to which it remains stable and secure. Which is a great advantage of this. Also, there is no monopoly on this. Which can increase or decrease its value. Everyone has a right on it, those who buy it.
Simultaneously, there has been exponential growth in cryptocurrencies. It is growing very fast. At present, this industry is worth $ 1.5 trillion. In future also it is expected that it will continue to grow at the same pace. The Crypto Currency market is open 24/7. You can buy or sell it at any time. It has no time bound.
Disadvantages
The biggest thing is that cryptocurrencies cannot be scale-up. There is a lot of problem in scaling it up. Like Visa and MasterCard have such a huge infrastructure. In comparison, Crypto Kitties are nowhere to be seen competing.
If the consumer moves to a New Cryptocurrency, Except Cryptocurrencies such as Bitcoin. Or stop using Digital Currency altogether. So the value of cryptocurrency starts decreasing. That is, their value depends only on the increase or decrease of demand only and only.
However cryptocurrencies remain encrypted. Its information is known only to the sender or receiver. But hackers can hack them. If it gets in the hands of a hacker. So the hacker will easily hack these. That is, Cyber Security is a very big issue. This is its great disadvantage.
Elon Musk is very supportive of Cryptocurrencies. He has also publicly shown his support. But the warren buffet denies Crypto Currency outright. They say that they are not regulated by the United States Federal Reserve or the Central Bank.
So I don’t believe in them. However, it is true that there is no one to regulate cryptocurrencies. If it is not regulated by a central authority, then it is a huge disadvantage of them.
And there is always a risk of losing these currency from your virtual wallet. Because thieves can easily take it from the website. In addition, it is very weak. Scammers can easily scam them by using platforms like Facebook, Instagram, Twitter etc.
Types
Although cryptocurrencies are many, but three currencies are prominent among them.
- The first bitcoin, bitcoin came out in 2009. It was established by the author of the white paper. Bitcoin is used by Blockchain Technology. Through this, users get the freedom to do transparent peer-to-peer transactions.
- The second Lite coin, it was launched in 2011. It is completely Decentralised. There is no central authority regulating this.
- The third is Ethereum, which came out in 2015. It is also a type of cryptocurrency. It is also based on Blockchain technology itself.