If you wish to know about this relatively new currency, you have reached the right place. Here you will know everything about what is cryptocurrency and how cryptocurrency works. It will help you cash in on them and benefit from it when the chance appears.
What Is Cryptocurrency?
As the name truly suggests, cryptocurrency is a digital currency made through cryptography. They have one of the most secure forms of transactions where counterfeiting or duplicating transactions is impossible. They use a technology called Blockchain, which is a form of a secured digital ledger.
Even the creator cannot track the involved individuals from the cryptocurrency transactions. It is the major USP of crypto because people prefer fund transactions that don’t have government intervention or paper/digital trails. Crypto transfer is possible through wallets and even through USB drives, although USB drives are not so safe.
Because of the huge network necessary to function, not everyone can create crypto even with the correct technology and tools. So most available and functioning cryptos are safe in terms of robustness.
Entry Of Cryptocurrency In India
Cryptocurrency arrived in India while it was available to the rest of the world. In India, too, people first collected cryptos through mining, an online process to find cryptos and store them on the computer. People usually stored them in data drives and then started using digital wallets.
However, crypto was not legal tender in India, so everyone involved in crypto trades was penalised. In 2018, the RBI banned banking institutions from dealing with Virtual Currencies like cryptos. But in March 2020, the Supreme Court of India reversed this ban. And later on, the government also stopped penalising individuals for purchasing and selling cryptos.
What Are The Basics Of How Cryptocurrency Works?
To further understand what is cryptocurrency and how cryptocurrency works, you must know its major components and functioning. Given below are some major components that help cryptos function.
Keys
Every individual with cryptocurrency has two keys, Private Key and Public Key, which are basically addresses. A private key is a secure key that you cannot share with anyone else, and its purpose is to claim ownership of the crypto. A public key is an address you can share with others to receive cryptos. When a sender sends you cryptos through your public key, you have to claim and authorise the transaction with your private key.
Blockchains And Transactions
Blockchains are digital ledgers that store all transactions made through a crypto key or address. Several secured network computers host these blockchains. So the transactions are secure, and even the crypto creator cannot know the people transacting cryptos. They can only know the key/address that made the transactions, and there is nothing that can link a user with a key/address. So the people involved in the transaction are anonymous from the crypto creator and the government.
Wallets
Earlier, people used to get cryptos through mining, so they stored them in hard drives and transferred these drives whenever needed. But nowadays, there are more secure ways to transfer cryptocurrency through wallets. Several crypto trading apps also allow wallet storage, trading, and transactions.
Popular Examples Of Cryptocurrency
Bitcoin was one of the first successful cryptocurrencies, and its name remained synonymous with cryptocurrency during its initial days. But later on, several tech and financial companies came forward to develop their cryptos. Given below are some of the major cryptocurrencies available today.
Bitcoin – BTC
Current Price: USD 41,810
Market Cap: USD 795,144,968,562
Circulating Supply: 19,017,668 BTCs
Ethereum – ETH
Current Price: USD 3,089
Market Cap: USD 372,194,266,063
Circulating Supply: 120,466,305 ETHs
PAX Gold – PSG
Current Price: USD 1,952
Market Cap: USD 621,877,056
Circulating Supply: 318,454, PAXGs
Maker – MKR
Current Price: USD 1812
Market Cap: USD 1,772,413,169
Circulating Supply: 977,631 MKRs
BNB – BNB
Current Price: USD 420
Market Cap: USD 68,628,205,901
Circulating Supply: 163,276,975
Note: The prices and other details are as of April 2022, and they are subject to change as per performance and other conditions.
You just went through the basics about what is cryptocurrency, how cryptocurrency works, their place in India and their popular examples. These will come in handy whenever you wish to invest in cryptocurrency. But a word of caution is to know everything about the crypto you are purchasing. As these are free from government regulation, their trustworthiness needs verification.
When you are about to purchase crypto, make sure of the objectives of the issuing company, organisation or individual. It will reduce your risks from this new form of investment and help you get great results that are impossible in any other investment scheme.
