What Is Cryptocurrency? Ultimate Guide

Currency was and is always a fascinating term for mankind. Because of technology, everything is becoming digital. With the leap in technology, the currency has also become digital. This digital currency is known as cryptocurrency. In this article, we are going to understand what is cryptocurrency? 

Table of Content

• What is Cryptocurreny?
• How Cryptocurreny works?
• How to use Cryptocurrency?
• What is Cryptocurreny Mining?
• How to earn Cryptocurrency?
• What are the top 10 Cryptocurrency?
• Advantages
• Disadvantages
• Is NFT also Cryptocurrency?
• Future of Cryptocurreny
• Finally

What is cryptocurrency?

Cryptocurrency comes from two words. Crypto and currency. Crypto means cryptographic techniques and currency refers to money. So what is cryptocurrency? In other words, cryptographic is a currency that has protection with the help of cryptographic keys. This makes the currency highly securable.

Cryptocurrency is a digital currency that has no physical existence. Bitcoin was the first cryptocurrency. But there are several other cryptocurrencies in the market too. Recently cryptocurrencies are getting highly popular among the masses.

In the web 3.0 cryptocurrency will be used as a permanent feature. If you are interested in web 3.0 you can read about 10 examples of web 3.0 in our guide.

How cryptocurrency works?

Cryptocurrency works on a distributed ledger known as the blockchain. This public ledger stores all the information regarding cryptocurrency. For example the ownership and transactions.

Read our blockchain guide to understand its working.

The main benefit of cryptocurrency is its decentralization. This means that there is no need for a third party to carry out transactions. So it is directly done between two persons.

How to use cryptocurrency?

With a clear picture in mind of what is cryptocurrency. You might be thinking about how and where you can use this cryptocurrency. Following are some of the ways in which you can use cryptocurrencies:

• You can invest in a cryptocurrency like stock or bonds.
• You can use cryptocurrency to buy different things like watches and cars.
• In web 3.0 all the purchases and transactions will be on the basis of cryptocurrencies.
• In the metaverse, you can buy different things like plots, land, etc with the help of cryptocurrencies.

Unclear about the metaverse, read our guide on what is the metaverse?

What is cryptocurrency mining?

Now it’s clear what is cryptocurrency and how it works. Let’s see how cryptocurrencies are created. I.e what is cryptocurrency mining? To create a cryptocurrency you have to mine it. Mining a cryptocurrency is a highly complex, time taking and expensive task. This task is carried out with the help of special computers specifically made for mining.

The most famous type of cryptocurrency is bitcoin. It’s also the most valuable. At the present moment, 1 bitcoin is equal to 20,544.30 USD.

Read our easy-to-understand article on how to mine bitcoin.

How to earn cryptocurrency?

There are many ways to earn cryptocurrency. Let’s understand some of them.

• You can buy a cryptocurrency directly from the stakeholders or crypto exchanges such as coin base.
• You can mine a cryptocurrency. However, it’s a very difficult task and will need some good investment for a solo person.
• You can invest in a company that is mining cryptocurrency.
• There are many cryptocurrency games that allow you to collect and gather cryptocurrency. For Example, Rollercoin is a popular game for earning cryptocurrency.

What are the top 10 cryptocurrency?

Above we have talked about how bitcoin is the most popular and valuable cryptocurrency. However, there are many other cryptocurrencies available now. There are other cryptocurrencies that are also becoming quite popular. These cryptocurrencies have different functionalities. For example, Ethereum is another popular cryptocurrency. That is most popular for writing smart contracts.

Then there is Ripple. It is used by banks for faster transactions. Below are the top 10 cryptocurrencies at the moment:

1. Bitcoin
2. Ethereum
3. Tether
4. USD Coin
5. BNB
6. Binance USD
7. XRP
8. Cardano
9. Solana
10. Dogecoin

Advantages of cryptocurrency

Following are some of the advantages of  cryptocurrencies:

• The first and foremost benefit of cryptocurrency is its removal of third parties and the middle man. As cryptocurrency works on decentralization there is no need for third parties to carry out transactions.
• As it removes the third-party apps, transactions also become easier to carry on.
• Because of its third-party removal transactions become faster and more efficient.
• Cryptocurrency is highly profitable and as the trend suggests its popularity will be on the rise.
• Last but not least cryptocurrency is highly secure and unhackable.

Disadvantages of cryptocurrency

Where cryptocurrency has some benefits, it also carries some disadvantages. following are some of the disadvantages of  cryptocurrencies: 

• Cryptocurrencies are highly traceable. This can be perceived as both an advantage as well a disadvantage. As not everyone likes their transactions to be public which is easily traceable.
• Many criminals are manipulating cryptocurrency and using it for money laundering and other illegal activities.
• Mining a cryptocurrency such as bitcoin is very energy consuming that has a lot of environmental disadvantages. Mining a single coin is so hazardous to the environment. Now think about hundreds and thousands of coins.
• Some theorists say that cryptocurrency is here to stay. While some maintain the idea that cryptocurrency is going to die soon.

Is NFT also cryptocurrency

NFT is known as nonfungible tokens. They are not physical like the cryptocurrencies. And they are built in the same way as the cryptocurrencies are. However, these are the only similarities between NFT and cryptocurrency.

Future of cryptocurrency

The future of cryptocurrency seems quite bright. There are some speculations that cryptocurrency will die soon. However, the trends and analysis are pointing in the other direction. According to analysis, the cryptocurrency industry will increase three times by the year 2030.

The trend and popularity of cryptocurrency are rising day by day. And this is going to increase once Web 3.0 will be launched.

Finally

Cryptocurrency is a fascinating term that most people don’t understand. In this article, we have answered the question “what is cryptocurrency”. With the help of this article, you are ready to tap into the world of cryptocurrency. According to analysis and trends, Cryptocurrency is here to stay and even become stronger. So it is better we should slowly shift towards cryptocurrency as soon as possible.