Cryptocurrency– you’ve probably heard so much about this at this point that you cannot differentiate the truth from what is false or probably exaggerated.
Cryptocurrency is spoken of today in the same breath as the biggest and latest world technologies. We hear of multi-million dollar investments in crypto; we hear of crypto token crashes. At the same time, Bitcoin plunges and rises, while Ethereum remains a distant second.
Perhaps you’re reading this article because you already know a lot about crypto and are curious as to the possible tidbits that you might have missed in your research. Or you’re reading because you want a concise overview.
Whichever category you belong to, you are certain to find something in this article to sate your curiosity.
What is Cryptocurrency?
Before delving into the talk on the cryptocurrency market, tips for buying cryptocurrency, and how to invest in cryptocurrency, it is important to speak about the relationship between the blockchain and crypto.
Cryptocurrency is a special digital asset that uses computer-generated mathematical algorithms and blockchain technology to function as an exchange unit in its most basic form. In many ways, cryptocurrency is like real money.
This is possible because it possesses the precise required features that validate any legal tender. For one, it is immutable and cannot be reproduced. It is also highly secure. In fact, it is this security feature that has made it so popular today.
To this effect, many experts have predicted that the rise of cryptocurrency will be the death of modern banking as we know it. And this holds arguably true. Bitcoin and Ethereum already function as legal means of exchange in many circles. And their popularity will only increase.
The blockchain, on the other hand, exists in tandem with cryptocurrency. Each crypto token has its own unique blockchain, which functions more or less according to the rules laid out by the original founder of Bitcoin, Satoshi Nakamoto.
Where did Cryptocurrencies stem from?
Satoshi programmed an inherently decentralized digital ledger to hold the records of all transactions carried out using the Bitcoin token. By doing so, he laid the foundations for decentralized finance- a way for people to carry out financial transactions without needing an intermediary such as a Central Bank.
How Does the Blockchain Work?
The blockchain functions as a network of nodes, i.e., computers. The blockchain network is maintained concurrently by all of the nodes involved, with the ledger updated as one single unit.
This means that no single entity can alter without the consent of at least 51% of the network, which is as safe as it goes. It is true, however, that some blockchains have suffered attacks in the past. These attacks have come when malicious elements manage to take control of more than half of the nodes in the network.
While inherent risks remain, the blockchain is, in truth, the most secure form of digital finance ever invented by man. It, therefore, remains well placed to dominate the finance sphere in years to come.
What are the Best Cryptocurrencies?
The best cryptocurrencies are the ones with high value, such as Bitcoin, Bitcoin Cash, Ethereum, and BNBs. While prone to sudden plunges, all of these cryptocurrencies are appealing to investors because of their volatility.
Investors will quite naturally seek to buy Bitcoin Cash, Ethereum, Bitcoin, Bitcoin Gold, and the big names over obscure coins. It should be noted, though, that for as long as Bitcoin price continues to rise, the value of other altcoins will trail in its wake.
Features of Cryptocurrency?
While there are several kinds of cryptocurrency today, they have certain key features in common. These features are as follows:
1. Peer-to-Peer
All cryptos exist on a P2P decentralized network. For this reason, it is possible to avoid third parity fraud and interference.
2. Cryptography
All cryptocurrencies are secured via military-grade encryption protocols that are basically impossible to decipher.
3. Immutability
Transactions carried out using cryptocurrency cannot be altered by anyone. This makes it a foolproof means of financial transaction.
4. Anonymity
Transactions made using cryptocurrency are completely anonymous. The only visible thing is the address. Such is the infallibility and security afforded by the encryption.
5. Transparency
All transactions carried out on the blockchain are visible at any time on the distributed ledger that is the blockchain.
Conclusion
If you seek to understand the full technicalities of the blockchain, it is ideal that you check out Satoshi’s initial whitepaper on Bitcoin.
If you have read and digested our article until now, you cannot be said to be a crypto novice anymore. If you are looking for investment tips, the best advice you can get is to do apt research on a token before buying it.
Buying cryptocurrency is quite easy. All you have to do is register with a top exchange such as Binance and start trading!
