Business And Finance

Five Of The Most Basic Questions About Cryptocurrency

Cryptocurrency is not an unknown word anymore as it keeps creating a buzz in the news. Nowadays, when we hear about cryptocurrency, we naturally become curious about what it is, who made it, how it works, and so on. Cryptocurrency is changing the way we make payments. It takes us to the future where there won’t be a need to carry cash or cards anymore. Crypto coin allow you to make transactions digitally.

This topic is quite enjoyable once you dive in to learn about it. For example, today, there is a Bitcoin earning app free to use.

Let us get our basics right:

What is cryptocurrency?

Cryptocurrency is a digital version of money. It is a digital currency that we can use to trade and invest anywhere in the world. It is a medium of exchange to buy goods and services without the bank’s involvement. Like we use traditional money to trade, we can use crypto to sell via crypto trading apps.

Cryptocurrencies altogether cancel out traditional payments, such as cash, debit cards, credit cards, or cheques. In addition, cryptocurrency is decentralized as any government authority does not back it, for example, the U.S. dollar. It would be helpful if you had a crypto wallet to store your currencies, and you could even use it to exchange cryptos.

What is the history of cryptocurrency?

The term cryptocurrency was coined in the 1980s by American cryptographer David Chaum. He used cryptography to secure and verify transactions, making the transactions untraceable. In the 1990s, they began to research cryptography tools to create a decentralized digital currency.

Finally, in 2008, an unknown person named Satoshi Nakamoto submitted his Bitcoin White Paper, and that paper was the launch of cryptocurrency. The premier Bitcoin transaction between Nakamoto and Hal Finney on 12th January 2009. At the early start of bitcoin, an individual paid 10,000 bitcoins for two pizzas. If only he had held on to his bitcoins, they would be worth a million dollars.

What is the link between cryptocurrency and blockchain?

All the transactions with traditional money are in bank passbooks and bank statements. Similarly, all the transactions done with cryptocurrency are recorded, secured, and validated on blockchain technology. Blockchain is a secure public ledger that makes the transaction visible to all users. Still, at the same time, the transaction is unalterable that is the level of security blockchain provides.

Which cryptocurrency holds the most value?

Bitcoin, created in 2009, is the original cryptocurrency, and it remains on top. However, when talking about cryptocurrency, we often talk about Bitcoin. As of now, the market price on Bitcoin is $729 billion, and the cost of a bitcoin is $37,909. Ethereum is the second-largest cryptocurrency after Bitcoin, built on blockchain technology. Other than Bitcoin and Ethereum, other cryptos are gaining popularity daily, such as XRP, Cardano, Decentraland, Polkadot, Terra, Axie Infinity, Binance Coin, Bitcoin, etc. Solana. There is no particular figure on how much you can store in your bitcoin wallet.

How is crypto mining done?

In simple terms, crypto mining is the process of validating new transactions and creating new bitcoins. The validation requires solving complex mathematical problems that are difficult to solve. However, the crypto miner who solves the problem first gets the right to post the transaction into the ledger and gets rewarded typically in cryptocurrency.

You now know the essential info. You can research which cryptocurrency you want to invest.