Cryptocurrency is a fantastic invention of the modern world. The popularity of cryptocurrency has taken the world by storm. In this guide on Cryptocurrency for dummies, we will explain every single aspect of cryptocurrency.
The actual use of Cryptocurrency can play a helping hand in changing the way we transfer and invest money. For most beginners, it is not easy to perceive the idea of Cryptocurrency. So, let’s start from the very basics.
Cryptocurrency for Dummies – What Is Cryptocurrency?
Cryptocurrency is the type of currency that is usually exchanged online for commodities and services. It is a virtual form of cash, protected by cryptography, which aims to make it challenging to double-spend.
Most cryptocurrencies have networks that are established on blockchain technology. Blockchain is the organizational procedure that is distributed across many computer networks and ensures security.
Why is there a Need for Cryptocurrency?
The world is converting to the digital world, especially after the Covid-19 pandemic virtual system is considered safer than conventional. Moreover, digital currency can save a lot of time by making payments and transactions relatively easy.
With the ever-changing circumstances of the world, we must have to equip ourselves with the latest technologies. From online stores to online school classes, everything is now online. So, it is the need of the hour that we have virtual money as well.
How Cryptocurrency Can We Grow in the Society of 2021?
According to financial experts, cryptocurrencies are getting the trust of the public rapidly. Specifically, between 2018 and 2020 they developed a positive image in the eye of people. The world is quite unpredictable, and we can expect a lot of progress in the Cryptocurrency industry in 2021.
The corona pandemic has affected the world badly, and unemployment has risen to an alarming level. Many industries are shutting down due to the lockdown. So, to avoid all these sudden tragedies, people are now shifting towards online systems.
Many renowned companies such as Facebook, Tesla, Google, and Paypal have incorporated cryptocurrencies into their strategic plans. The spike in the bitcoin value is predicting that Cryptocurrency has the potential growth in 2021.
Enough People should have it
According to a report, more than 100 million people are using Cryptocurrency now. But as the price of bitcoin is soaring speedily. Suppose the speed of people shifting to bitcoin remained the same. There are strong chances that Cryptocurrency will double in 2021.
A Trusted Wallet
Cryptocurrencies are free of any corruption as they are based on the blockchain. Blockchain technology has an impressive reputation among users. You can use any reliable digital wallet to store your Cryptocurrency.
Trust on Cryptocurrency
The digital currency users have enhanced in recent times. So, that will suggest other people trust cryptocurrencies. But some people still have trust issues and are reluctant to invest. Cryptocurrency to invest in now can be risky due to the puzzle of volatility.
Short Introduction to Crypto History
The official journey of crypto-currency had begun in 2009 when Satoshi Nakamoto introduced Cryptocurrency. That Cryptocurrency was named Bitcoin. However, the term Cryptocurrency was first used by Wei Dai in 1998.
Nevertheless, the identity of Nakamoto is quite mysterious. That is why most people do not trust Cryptocurrency. The reason behind the invention of Cryptocurrency was the financial crisis that surrounded the world in 2008. Even the economic powers like the USA become a victim of it.
It should be noted that he was not the first person who came up with the digital currency idea. Before him, in 1983, David Chaum (cryptographer) came forward with the cryptographic system and named it eCash. Twelve years later, he established another system and called it Digicash.
Benefits of Cryptocurrency
Cryptocurrency has gained immense popularity in recent years. It has revolutionized the digital world. Several companies are now receiving payments through Cryptocurrency.
As the value of bitcoin has risen, people are showing more interest in investing in bitcoin. Additionally, Cryptocurrency uses blockchain technology, which plays a vital role in increasing its credibility. Here are a few benefits of using Cryptocurrency.
Control on Corruption
Corruption and other regularities related to money transactions can be reduced with the help of using digital currency (Cryptocurrency). Firstly it has all the factual data of users, unlike the payment with notes and coins.
Secondly, blockchain technology makes it an even safer and more secure system. Because the blockchain has all the data for transactions, in this way by the use of virtual currencies, we can reduce corruption.
Eliminate Extreme Money Printing
With the use of Cryptocurrency, the use of notes will decrease. So, in this, we can get rid of printing bulks of currency notes. Note printing is not a convenient task. It demands a lot of time, labor, and apparatus.
By switching to digital money, we can save all that human labor and expenditures and use it for numerous other purposes. Moreover, according to various researches, notes are a powerful medium to transmit viruses. Cryptocurrency can help control viruses.
Take Control Back from People who are in Charge of your Money
This digital technology gives you quick and easy access to your money. Now your money will be your money in the true sense. Cryptocurrency provides the charge of your money to you, not any other.
Cutting Out Middleman
Cryptocurrency tends to put an end to the involvement of third parties. You do not need to involve any bank, online money transfer system, or any other means. Conveniently by using Cryptocurrency, you can get direct access to your money.
It can help save a lot of time and money because banks cut a specific percentage of money for every transaction. So, by using Cryptocurrency instead of traditional money, we can resolve this issue.
Saving Unbanked
Most people use banks to save their money. In this way, you have to include a third agent between you and your money. But cryptocurrencies can make your money a private thing.
Furthermore, there are many formalities that you have to fulfill, but digital currencies help you get rid of that inconvenience.
Risk of Cryptocurrency
The risks linked with Cryptocurrency are usually about its volatility. So before investing hefty amounts in cryptocurrencies, you must consider the uncertainties and risks you can face. Some of those disadvantages are described below.
Volatility
Virtual currencies are volatile because there is the possibility of abrupt and sudden changes in the market. Due to those changes, prices can fluctuate drastically. It is the negative side of digital money that has to be kept in mind before investing. Otherwise, you will have to bear the massive loss.
Lack of Regulation
Cryptocurrencies usually do not have any trustworthy regulatory body on their back. But, the conventional currencies regulated by the financial authorities make them more reliable. That’s why Cryptocurrency lacks regulation.
If the developers of digital currency get themselves linked to any authentic monetary jurisdiction, it will help regulate Cryptocurrency. Furthermore, its price is governed by the rule of demand and supply in their respective markets.
Frequently Asked Questions (FAQs)
What is Cryptocurrency in layman’s terms?
Cryptocurrency for beginners or laymen is the currency that is in virtual or digital form.
Can you make money with Cryptocurrency?
Yes, you can make money with Cryptocurrency in various ways. The simplest method of earning through Cryptocurrency is purchasing coins such as Bitcoin, Ethereum, etc. You can make money by selling them when their value rises in the virtual market.
What is Cryptocurrency’s easy explanation?
We can define Cryptocurrency as the “digital money” not present in physical form but in virtual currency. In childhood, you have learned the definition of software in your computer textbook.
According to that definition of software, “we cannot see or touch it.” Online currency is like using it, buying products from it, and investing in it but cannot touch it.
How does Cryptocurrency work, the beginner?
It uses a system named blockchain. This system holds the record of all information of transactions. Blockchain is a reliable system, and it is impossible to hack, fraud, or cheat it.
Is Cryptocurrency the future?
It is too early to say that Cryptocurrency is the future. The reason is that there are a lot of concerns about the regulation of this technology.
Is it wise to buy Bitcoin?
Bitcoin has earned a lot of fame in no time. But when it comes to investment, you need to think about uncertainties associated with it as well. Invest the money by keeping in mind how much risk tolerance you have. Furthermore, to some extent, cryptocurrencies are trustless because they have no direct association with any government.
Final Words – Cryptocurrency For Dummies
The intelligent use of cryptocurrency can help the world in a lot of ways. If you use it wisely and smartly, you can enjoy a lot of profit from it. Risks are linked with every business, but that does not mean that you don’t have to trade. You need to learn techniques and concepts of trading.
Cryptocurrency is quite a complicated term. That’s why most beginners did not comprehend it. But in this guide on cryptocurrency for dummies, we have covered each aspect for you.
