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Cryptocurrency is a new form of digital money. It has the potential to operate in mainstream similar to a paper currency of any country with no geographical boundaries. Cryptocurrencies rely on blockchain technology, which gets away from the intermediaries in a financial transaction like banks. It is a de-centralized technology where every computer in the transaction confirms the transactions.

With globalization setting its feet in every developmental aspect of economic growth and financial independence, world becomes more interconnected and rigorous regulations setting in, cryptocurrencies may offer a valuable alternative. Out of many cryptocurrencies, bitcoin is the most famous. Bitcoin remained the only cryptocurrency until 2011. Then Bitcoin enthusiasts started noticing flaws in it, so they decided to create alternative coins, also known as altcoins, to improve Bitcoin's design for things like speed, security, anonymity, and more. Presently, over 4,000 cryptocurrencies are available, and the number is expected to increase in the future.

Cryptocurrency offers the following benefits over conventional legal tender due to its decentralized nature:

Basics of Cryptocurrency

1. Reducing corruption

Cryptocurrencies aim to resolve the issue of absolute power by distributing power among many people or, better yet, among all the members of the

2. Eliminating extreme money printing

Cryptocurrency is an electronic form of currency in coins which is based on the blockchain

3. Giving financial independence and control to people on their money

With traditional cash, you're basically giving away all your control to central banks and the government. With cryptocurrencies, you and only you can access your

 

4. Eliminating middlemen

With traditional money, every time you make a transfer, a middleman like your bank or a digital payment service takes a With cryptocurrencies, all the network members in the blockchain are that middleman; their compensation is formulated differently from that of fiat money middlemen's and therefore is minimal in comparison.

5. Serving the unbanked

A vast portion of the world's citizens has no access or limited access to payment systems like Cryptocurrencies aim to resolve this issue by spreading digital commerce around the globe so that anyone with a mobile phone can start making payments

 

Risks associated with cryptocurrency

  1. Volatililty of the cryptocurrency
  2. Lack of regulatory/governmental regulation

Cryto Gadgets

1. Wallets

You can't get involved in the cryptocurrency market without a crypto wallet. It is recommended that you get the most secure type of wallet, such as hardware or paper wallets, instead of using the convenient online

2. Exchanges

After you get yourself a crypto wallet (see the preceding section), you're ready to go crypto shopping, and one of the best destinations is a cryptocurrency These online web services are where you can transfer your traditional money to buy cryptocurrencies, exchange different types of cryptocurrencies, or even store your cryptocurrencies. Storing your cryptocurrencies on an exchange is considered high risk because many such exchanges have been exposed to hacking attacks and scams in the past. When you're done with your transactions, your best bet is to move your new digital assets to your personal, secure wallet.

Investment

By analyzing the price action and conducting proper risk management, you may be able to stack the odds in your favor and make a ton of profit in the future keeping the risks in mind.


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Category Others, Other Articles by - CA Robin Kumar 



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