What is cryptocurrency?
The concept cryptocurrency was introduced a few years ago, but a common doubt arises in everyone’s mind. What actually is cryptocurrency or bitcoin?.
“Cryptocurrency, crypto- currency or crypto is a digital currency, in which transactions are verified and records maintained by decentralized system using cryptography, rather than by a centralized authority.”
In simple words, cryptocurrency is a digital asset. The name originates from the fact that all of its transactions are highly encrypted, making the exchanges highly secure. It is designed to work as a medium of exchange in different types of transactions using cryptography. This medium of exchange also designed to work through a digital network which are managed and controlled by a central authority. Such as government or bank, to uphold or maintain it. It is decentralized in nature, unlike traditional currencies. The most important type of cryptocurrency is ‘Bitcoin’, it is an electronic coin which was first introduced in the year 2009.
How it works:
Most importantly, cryptocurrency allow individuals to take complete control over their assets. It is a peer-to-peer system that can enable anyone anywhere to send and receive payments. cryptocurrency are increasingly held as investments, and they use to buy everything from software to real estate and to illegal drugs. The transactions of cryptocurrencies is secured and observed by a technology called ‘Blockchain.’ These transactions are recorded publicly on distributed or tamper – proof ledgers known as Blockchains. These records are updated and held by currency holders. The units of cryptocurrency are created through a process called ‘Mining’, which involves using computer power to solve complicated and mathematical problems to guess and check trillions of possible solutions known as ‘proof of work’. many cryptocurrencies use this method, but some instead use a validation mechanism known as ‘Proof of stake’. It is similar to physical coins, which have value and can be used while trading as a form of growing investment.
The most popular cryptocurrencies by market capitalisation are :
Bitcoin, Ethereum, Bitcoin cash and Litecoin.
And some other cryptocurrencies includes , Tezos, Eos and Zcash.
Bitcoin
Bitcoin is the oldest and most popular cryptocurrency in the world. After the creation of Bitcoin, number of cryptocurrencies available over the growing internet. It is a digital coin is created on its own blockchain and acts in much the same way as traditional money. Bitcoin is now primarily regarded as a store of value. The history of Bitcoin started with its invention and implementation by Satoshi Nakamoto, who integrated many ideas from cryptography community.
Ethereum
Ethereum is a cryptocurrency network, that uses blockchain technology to enable the creation of smart contracts and other decentralized applications. A logo for ethereum is one of the largest Altcoins. Ethereum is presently the most popular altcoin, followed by other stable coins.
Ethereum is conceived in late 2013 by Vitalik Buterin a cryptocurrency reasearcer and programmer. Ether is the native cryptocurrency of the platform. It stands in number second in market capitalisation.
Litecoin
Litecoin is an cryptocurrency and an open source software project released under MIT/X11 license. It is founded by a former Google Engineer named Charlie lee in the year 2011 two years after a relase of Bitcoin.
Litecoin has a faster transaction processing time compared to Bitcoin.
Bitcoin cash
Bitcoin cash is a Altcoin was created in the year 2017. It is considered as a Fork of Bitcoin, Although it shares many of the similar characteristics as Bitcoin but also integrates some changes and features that set it apart. Bitcoin cash enables peer to peer payments between individuals but in digital form.
Future of cryptocurrencies.
Cryptocurrencies are faster, more powerful financial technologies are transforming our concept of money and challenging financial institutions that currently manage it.
In a last decade years, cryptocurrency have grown to trillion dollar technologies with potential to disrupt the global
financial system.
However, 2021 was a massive year for cryptocurrency. There’s tremendous focus and attention is being paid to cryptocurrency. Bitcoin users predicts by 2024, different types of Bitcoins are released. And predictors even says that the price of Bitcoin was $100,000 last year , it can become all time high in November. The popularity of this form of currency is expected to grow exponentially, as it is decentralized, safe and anonymous. Big companies as fund managers to Starbucks executives are trying to figure out how cryptocurrency fits into their business. The latest record high follows previous high points over $60,000 in April and October, as well as a summer drop to less than $30,000 in July. This volatility is a big part of why experts recommend keeping your crypto investments to less than 5% of your portfolio to begin with.
U.S. government officials and the Biden administration have increasingly expressed interest in new regulations for
cryptocurrency. People’s interest in crypto has been increasing, it has become a hot topic not only among investors but in popular culture too.
Bitcoin price predictions
Unfortunately, Bitcoin’s price is extremely difficult to predict and even more susceptible to market factors than more established asset classes.
A forecast by Jeremy liew, snapchat’s first investor predicts that Bitcoin to hit a staggering $500,000 by 2030. Technical and blockchain data analyst, Matthew Hyland predicts that Bitcoin can reach upto $100,000 in 2022. The price of Bitcoin in January 2022 is almost equal to its price in January 2021. He also recently tweeted that a dip below $40,000 could lead to “free fall” into a Bitcoin bear market.
Founder and CEO of the digital assets marketing and consulting firm, Robert Breedlove predicts that $307,000 by October 2021 , and $12.5 million by 2031. Breedlove speaks often about the broader social implications of crypto as a form of more transparent, decentralized currency — but his price predictions haven’t exactly been spot-on.
Important tips
Even if Bitcoin breaks $100,000, stay focused building on your overall portfolio. No one really knows about the value of cryptocurrency in coming years, it’s still a new and speculative investment, without much history on which to base predictions. That’s why it’s important to only invest what you’re prepared to lose, think before investing, invest only that much on the basis of how much you can loose. And stick to more conventional investments for long term wealth management.
Keep your investments small, and never put crypto investments above any other financial goals like saving for retirement and paying off high interest debt. the average person should favor simple ways of investing that are easy to understand. Our take is that we don’t think you need Bitcoin in order to reach financial goals,” by adding
,This will keep you on track for core financial goals and better position you long-term for a healthy retirement says Gutierrez .
