What is cryptocurrency?

Cryptocurrency is the new favourite investment market for investors. So what is cryptocurrency? In simpler words, Cryptocurrency is a digital currency that is designed to work as a medium of exchange. They are built on blockchains. Blockchain is a system that records and maintains transactions made in cryptocurrency across several computers that are linked to a peer-to-peer network. Unlike paper money, cryptocurrency doesn't exist in physical form.

The first well-known cryptocurrency is Bitcoin, which was created by a group of anonymous people using the name Satoshi Nakamoto in 2008. They wanted to create a new form of payment that could be used both internationally and also decentralized, with no financial institutions or government associated with them. 

Bitcoin is limited in quantity like gold. It has a stock of 21 million bitcoins. Each bitcoin is divided into 100,000 Satoshies. Out of 21 million bitcoins, 19 million have already been mined and 4 million have been lost in no way of recovery. 

After bitcoin, many other cryptocurrencies were developed. Ethereum is valued second only to bitcoin in the market. It has its own programming language called Solidity. It is an open-source blockchain-based platform that creates and shares businesses, financial services and entertainment applications as well. 

Dogecoin was created by Billy Markus and Jackson Palmer as a joke. It is considered the first meme coin and the first dog coin. Dogecoin was developed in 2013 and has reached a market value of $85 billion. Shiba Inu, Litecoin, Cardona coins are also other known currencies in the market.

In recent years, cryptocurrency has gained a lot of popularity, and it is for various reasons. 

Fees to invest in cryptocurrency are very low.

You can invest in cryptocurrency for as little as $1, unlike other investment markets, which makes the cryptocurrency market very approachable to new investors. It is not complex as the other markets. 

Potential for high profits.

One of the biggest reasons cryptocurrency has gained so much popularity is because of the potential for high profits. The cryptocurrency's market is extremely volatile, it creates a great potential for high profits for investors as you must have heard about people becoming millionaires by investing early in the market.

Seen as the future of money.

Cryptocurrencies are the future of money. Blockchain technology is getting adopted by more and more companies hoping to make trading a transparent process. Many countries like Japan, Germany, Spain, the UK, have already legalised the use of cryptocurrencies. 

Decentralized money. 

They are not associated with any government, which means they have the potential to remain stable despite the inflation in the country. This makes cryptocurrency appealing to many investors. 

There are always two sides to any story with many advantages, they are many disadvantages of cryptocurrencies as well. 

Investing in cryptocurrency can be beneficial to your portfolio, but it is not for everybody. You should consider big investments only if you are financially equipped since it is a perilous market to invest in. How do you see cryptocurrency as?