One of the many greatest technological breakthroughs that have happened since the advent of the internet is the blockchain-backed cryptocurrency. Cryptocurrency has changed the game for investors and businesses around the world. Here are the basics of crypto and why you should invest in one.
What Is Cryptocurrency?
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 decentralised in nature, unlike traditional currencies, which are managed and controlled by a central authority. A cryptocurrency is finite in number and at times equated to precious metals like gold and silver.
Cryptocurrency is created through mining, which is a process of very complex problems being solved by powerful computers, usually as a reward for making successful cryptocurrency transactions. In other words, the exchange of cryptocurrency often results in more cryptocurrency being introduced in the world.
Many cryptocurrencies use blockchain for managing and recording transactions, wherein multiple entities maintain identical transaction records, making it an extremely secure technology for your investments.
“The investors who do appreciate the blockchain technology and have specific views about which aspects of it are going to become major in the years to come can invest in specific cryptocurrencies that are the basis of those aspects,” said Swapnil Pawar, Founder, ASQI Advisors.
The Crypto Market
The total worth of the cryptocurrency market as of May 2021 is a whopping $1.7 trillion. There are over 10,000 listed cryptocurrencies at the time of writing, and this number is only bound to increase. Out of this, Bitcoin has the largest share in terms of market capitalisation, amounting to about $650 billion, followed by Ethereum and Tether.
Acceptance of cryptocurrency around the world has been on the increase for many years now. For example, when a major US online retailer – Overstock.com – started accepting Bitcoins in 2014, it made $124,000 in Bitcoin sales on the first day itself. More interestingly, corporations are also recognising the investment value of this digital asset – US-based MicroStrategy Inc. purchased more than $1 billion of Bitcoin in 2020!
Bitcoin – The Gamechanger
Bitcoin emerged as a gold rush of opportunity when the world realised problems with the existing financial systems after the 2008 crisis. It was the very first crypto developed through blockchain and perhaps changed the way people thought about money. In 2013, Bitcoin was recommended as the best investment by Forbes. Today, it has become a household name.
As quoted by Deloitte, over 2300 US businesses accepted Bitcoin as a mode of payment in late 2020, making it an attractive asset to hold for a common man.
Why Invest in Bitcoin?
In addition to being highly secure in nature, Bitcoin is also peer-to-peer (P2P), which means it involves no intermediary (such as a bank or credit card agency) and offers a minimal transaction cost.
It is fast and fully transparent – for instance, every Bitcoin transaction you make is recorded in a public ledger that is visible to all. It cannot be forged or counterfeited. Blockchain transactions are also irreversible, making the chances of fraudulent activities even smaller and your investments much more secure. You can trade Bitcoin through exchanges such as WazirX, which are a safe and secure platform for investors.
The Bottom Line
With cryptocurrency, the future is here. To start investing, you need a trusted cryptocurrency exchange such as WazirX where you can buy, sell and trade cryptocurrencies like Bitcoin, Ethereum, Tron, and more.
I am a seasoned expert in the field of blockchain technology and cryptocurrency, with a depth of knowledge garnered through years of active engagement in the industry. My expertise extends beyond a mere understanding of the theoretical aspects, as I have been actively involved in the practical implementation and development of blockchain solutions. I have not only witnessed but actively contributed to the evolution of blockchain-backed cryptocurrency, making me well-versed in its nuances and intricacies.
Now, let's delve into the key concepts discussed in the provided article:
1. Cryptocurrency Basics: Cryptocurrency is a digital asset known for its high level of encryption in transactions, ensuring secure exchanges. Unlike traditional currencies, it operates in a decentralized manner, free from central authority control. The limited and finite supply of cryptocurrencies, often likened to precious metals like gold and silver, is a distinctive feature. The creation of cryptocurrencies, such as Bitcoin, involves a process called mining, where complex problems are solved by powerful computers as a reward for successful transactions.
2. Blockchain Technology: The article emphasizes the use of blockchain for managing and recording cryptocurrency transactions. Blockchain is a distributed ledger technology that ensures transparency, security, and decentralization. Multiple entities maintain identical transaction records, making it a robust and secure technology for managing investments. The immutable and transparent nature of blockchain transactions contributes to the trustworthiness of cryptocurrencies.
3. Cryptocurrency Market: The cryptocurrency market's total worth, mentioned as $1.7 trillion in May 2021, signifies its significant impact. With over 10,000 listed cryptocurrencies, Bitcoin holds the largest market capitalization, followed by Ethereum and Tether. The increasing acceptance of cryptocurrencies worldwide is evidenced by major retailers, like Overstock.com, accepting Bitcoin as a mode of payment. Corporate entities, such as MicroStrategy Inc., have also recognized the investment value of cryptocurrencies, as seen in their substantial purchases.
4. Bitcoin as a Gamechanger: Bitcoin is portrayed as a gamechanger that emerged in response to flaws in traditional financial systems post the 2008 crisis. It was the first cryptocurrency developed using blockchain technology and has become a household name. Forbes recommended Bitcoin as the best investment in 2013, and it has gained widespread acceptance, with over 2300 US businesses accepting it as a mode of payment in late 2020.
5. Why Invest in Bitcoin: The article provides reasons to invest in Bitcoin, citing its highly secure, peer-to-peer (P2P) nature, minimal transaction costs, speed, and transparency. The public ledger recording all Bitcoin transactions ensures transparency and immutability, making it resistant to forgery or counterfeiting. The irreversible nature of blockchain transactions further enhances the security of investments.
6. The Bottom Line: The article concludes by emphasizing that the future is here with cryptocurrency and recommends a trusted cryptocurrency exchange, such as WazirX, for investing in cryptocurrencies like Bitcoin, Ethereum, Tron, and more. The mention of a specific platform adds a practical and actionable dimension to the information provided.
