What Is Cryptocurrency in the Financial World?

The popularity of bitcoin has increased rapidly. It becomes a hot topic for many people. Bitcoin is an example of cryptocurrency or digital money. In this digital era, using digital money in some virtual transactions is something familiar. Many people get interested in investing in cryptocurrency. Though this investment is promising, it still has rules that you consider before buying this digital currency.

What Is Cryptocurrency in the Financial World?
What Is Cryptocurrency in the Financial World?
The Definition of Cryptocurrency 

Cryptocurrency is digital money and currency used for virtual transactions in the internet network. The secret keys are complicatedly functioning to protect and keep the security of this digital currency. The word cryptocurrency is coming from two words. Those are cryptography meaning to be a secret code and currency being the currency. The cryptography concept is famous since World War II. It is different from the conventional currency centering feature.

This digital currency is featured to be decentralized. It has no sides present and taking a role in a medium in a transaction. The payment with this digital currency is sending the sender to the receiver or peer to peer. However, all conducted transactions are still noted and controlled in the cryptocurrency network system. Mining cryptocurrency is noting this transaction and getting a commission of the used digital currency.

What Is Cryptocurrency in the Financial World?
What Is Cryptocurrency in the Financial World?
Types of Cryptocurrency 

Though it has developed since the 1990s, it has been popular 10 years ago. Some types of used cryptocurrency can be found such as Litecoin, Monero, Ethereum, ripple, and of course bitcoin. Today, it has more than 1.000 cryptocurrency types spread in the world. However, bitcoin becomes the top list of digital currency mostly used. It was created by Satoshi Nakamoto in which he only created 21 million coins based on the appropriate protocols. Furthermore, it has a blockchain system making a transaction of this digital currency. It lasts safely. The blockchain is similar to a big book doing notes on every transaction activity in a working system. It is working decentralized, valid, and a few mistakes. This schema is occurring in the value in which the digital transaction currency is safer, more practical, and easier than a conventional banking system.

Advantages and Disadvantages of Cryptocurrency 

Is it safe for investing in cryptocurrency? Before you value them, these are some advantages and disadvantages of cryptocurrency investment. You can make a deal with it.

Advantages

  • It has the potential of a high price increase in the future.
  • The blockchain technology makes a payment process of digital currency running safely, quickly, and easily.
  • It prevents a crime of fake money because a blockchain system is blocking possibilities to do two different transactions.
  • It saves personal data safely in which you can do financial transactions without showing original identity.

Disadvantages

  • The risks of law violence possibly happen because a governmental regulation is banned the existence of cryptocurrency
  • It has high volatility, the changing of the price suddenly
  • It is difficult to predict currency in the future so that you must be careful to estimate the loss.

Introduction to the Cryptocurrency

Do you know about Bitcoin? Well, I’m sure you know. I know it too, and I also regret something about it. Well, my regret is not mining Bitcoin before 2010. Those years were easier to mine Bitcoin than just one Bitcoin, and we can stack it how much we want like a hoarder. It was cheap when we converted it into our currency in those years, but how about today? One Bitcoin now worth around $9000. That is what I regret. If I mined Bitcoin back then, I probably have a High-End PC to play AAA games in the highest settings now. The Cryptocurrency is still mysterious to me until now.

Introduction to the Cryptocurrency
Introduction to the Cryptocurrency
Definition of Cryptocurrency

Cryptocurrency is a digital currency that used to do the transaction virtually through the internet. It requires complex and complicated passwords to keep it safe.

Different from the conventional currency that we used every day to buy stuff because they are centralized, digital currencies are decentralized. There is no party that acts to become the third. All transactions are peer-to-peer. Which is from the sender to the receiver. However, all transactions through Cryptocurrencies are recorded and monitored in the system. Cryptocurrency miners are the ones who recorded them all, and they will receive commissions, which is in the form of digital currency that can be used as well.

Introduction to the Cryptocurrency
Introduction to the Cryptocurrency
Cryptocurrencies in the world

Well, Bitcoin is not the only digital currency that circulated through the digital world. There are more than a thousand of cryptocurrencies that circulated on the internet, such as Litecoin, Ethereum, Ripple, Monero, and many more.

Bitcoin is on the top list of the Cryptocurrency. The creator of Bitcoin only made 21 million Bitcoin according to the protocol he agreed to. Experts say that Bitcoin mining will not stop and will still run at least until the year 2140.

Advantages

There are several advantages of Cryptocurrencies. As I mentioned in the first paragraph, there are chances that the converted value can be high in the future, such as today’s Bitcoin that is worth $9000 for one Bitcoin. With blockchain technology, Cryptocurrency transactions are easy, safe, and fast. It could avoid counterfeit currency as well because blockchain can’t do two different transactions with the same currency. Also, personal information is safe. Unlike conventional banks, you don’t need to show your real identity during the transaction.

Deficiency

When advantages exist, then deficiencies also exist. First is the government. Not all countries legalized Cryptocurrencies, and we could get into the prison. It could do high volatility, a condition when a currency’s value went up and down drastically in a short time. Also, Cryptocurrencies are hard to predict, which have a potential of big loss. Forgetting the Wallet key could make a fatal mistake, especially in investment.