Cryptocurrencies are digital currencies that let you trade for profit, buy and sell services and goods. Here are the Basics of Cryptocurrency.
What is Cryptocurrency?
Cryptocurrencies are digital currencies that we can use to buy and sell goods and services. However, cryptos use an online ledger with safe, secure, and robust cryptography to ensure your transactions are safe.
Cryptos are a form of payment that you can exchange online for goods and services. Numerous companies have their Cryptocurrencies, known as tokens. You can trade these tokens specifically for the services or goods that a company provides.
Cryptocurrencies function using a technology known as the blockchain. The technology is a decentralized platform that spreads across various computers used to record and manage transactions. Blockchain is also essential for Cryptocurrencies security.
Are Cryptocurrencies Legal?
Yes! In the United States, trading cryptocurrencies is legal. However, some countries, such as China, have essentially banned the use of digital currencies. So, trading cryptocurrencies legally depends on the individual country.
How Many Cryptos Are There?
There are more than 10,000 cryptocurrencies, and all of them are traded publicly. They continue to flourish, producing money through ICOs (initial coin offerings). As of August 2021, the net worth of Cryptocurrencies is more than $1.9 trillion. On the flip, as one of the most popular digital currencies, the total value of bitcoins is $1.2 trillion.
Top Cryptocurrencies by Market Capitalization
Today, there are ten most significant and most popular cryptocurrencies by market capitalization. These include:
- Bitcoin $891.5 billion
- Ethereum $380.8 billion
- Cardano $71.2 billion
- Binance Coin $69.5 billion
- Tether $68 billion
- XPR 47.5 billion
- Solana $45.6 billion
- USD Coin $31.7 billion
- Polkadot $30.7 billion
- Dogecoin $28.2 billion
Reasons Why Cryptocurrencies Are So Popular?
A variety of reasons makes cryptocurrencies incredibly popular. Some significant reasons include:
- Investors see cryptocurrencies as the most successful future currency. So they race to buy more of them before they become treasured.
- One of the reasons cryptos are popular is that they don’t have a central bank to manage the money supply. Having central banks work on currency supply can reduce the currency value.
- Cryptocurrencies investors are also impressed by the technology used by digital currencies. For example, blockchain is a decentralized recording and processing technology, which is more secure and safe than traditional payment systems.
- People also admire cryptocurrencies due to the increase in their value.
Is Cryptocurrency a Good Investment?
Cryptocurrencies’ value can go up, but some investors don’t see them as a real investment. The reason is that, like traditional currencies, there is no way to generate cash flow through cryptocurrencies. It means you can earn profit from them only if someone pays more than you did for the currency.
Buying cryptocurrencies is speculative and volatile, and trading with companies that are well established is less risky than investing in digital currencies, like Bitcoin.