Definition of Cryptocurrency
1. What is cryptocurrency?
- Cryptocurrency is the kind of asset in digital form, which can be exchanged in decentralized networks
- which can verify transactions through encrypted messages.
- It is a digital currency that is present in a decentralized public ledger called the blockchain.
- Cryptocurrencies are not controlled or maintained by any government or bank or institution.
- These are also referred to as a global entities.
- Cryptography is the group of binary data that can be used to work as a medium exchange.
- Cryptocurrency is the type of payment that is created by encryption algorithms.
2. Types of cryptocurrency
- cryptocurrencies can be classified into two types mainly as Bitcoin and Altcoins
- After Bitcoin became popular, many cryptocurrencies were formed. They were named as altcoins.
- Some of the names of cryptocurrencies that are considered important other than bitcoins include Ethereum, Dogecoin, Cardano, and Litecoin (LTC).
- Depending on the market capitalization and the total value of the coins in circulation, the following are the top 10 cryptocurrencies: Bitcoin, Ethereum, Binance coin (BNC), Tether (USDT), Cardano (ADA),
- Solano (SOL), XRP(XRP), Polkadot (DOT), Shiba Inu (SHIB), Dogecoin.
- There are many cryptocurrencies operating in India. The most popular ones are Bitcoin, Ethereum,
- Tether, Shiba Inu, WazirX, Dogecoin, Tron, Cardano, etc.
3. How cryptocurrency work?
- Cryptocurrencies mainly work based on the blockchain. Blockchain refers to a decentralized technology
- that uses many computers to manage and record transactions.
- People will buy cryptocurrencies by betting certain value for the asset hoping that it will increase in the future same as they do for the stock market.
- The value of the coins rises or falls depending on two factors: when investors buy more coins or depending on the utilization of blockchain.
- The group of transactions made by the investors is added to the chain which forms a block that validates the authenticity of transactions.
- Anybody can view the transactions that are made in a blockchain, so transactions made are transparent.
- The investors will have digital addresses of their own. These addresses come with private and public keys which have long strings of letters and numbers. Hence, they can use it to send and receive funds.
4. Main purpose of cryptocurrency
- Cryptocurrencies are mainly created to make transactions easier, secure, digital, and to make themworldwide. The transactions made, can be easily maintained and the risk of data getting lost or gettingpirated can be avoided.
- Cryptocurrencies were designed for the use of exchanging digital information. Experts say that Blockchain, which is a technology used for cryptocurrencies has the ability to perform even online voting, and crowdfunding.
- Cryptocurrencies make the transfer of funds between two parties easier without the intervention of third parties such as banks or credit cards.
- The payments made online are very secure in the form of virtual tokens which can be founded as ledger entries in the system.
5. Is bitcoin the same as cryptocurrency?
- Bitcoin is a digital currency that the cryptocurrency utilizes. And it is been controlled by a decentralized authority.
- Bitcoin can also be called a cryptocurrency that is used to perform cross-border transactions in an effective way.
- Bitcoin is the first cryptocurrency that was formed for secure transactions.
6.Is cryptocurrency a safe investment?
- Yes, cryptocurrency is a very good investment. If the value of the cryptocurrency rises but also there is a risk involved in it. There is a risk but it is highly profitable.
- Likewise, cryptocurrency and blockchain technology is growing stronger which will make it less risky in the near term.
- Investors and companies are investing in digital currencies that are cryptocurrencies as they are safe to invest large amounts of money.
7. Is cryptocurrency safe?
- Cryptocurrencies are very secure to make transactions. This is due to the cryptocurrency technology used. There is no intervention of a third party involved in it.
- These digital currencies are highly volatile, when there is huge volatility in an instrument it is more likely that investors can gain or lose money.
- The biggest risk in cryptocurrencies arises when the users lose their private keys.
- Cryptocurrencies can also be lost or stolen.
8. Which cryptocurrency is good for investment?
- The first three type of cryptocurrencies which is good for long term investment include Bitcoin, Ethereum, Cardano.
- However, bitcoin is considered the best investment as it gained popularity among investors and its value continuously increases.
- You can also invest in altcoins as whenever the bitcoins increase simultaneously there is a rise in the value of the altcoins.
9. Can cryptocurrencies be converted to cash?
- Yes, cryptocurrencies can be converted into cash. There are two methods on how cryptocurrencies can be converted.
- 1. It can be done through exchange or broker when you place a withdrawal request.
- 2. You can also convert it to money after selling it. It can be done by exchange or broker.
11. Is cryptocurrency safe for the long term?
- Yes, one can consider cryptocurrencies for long-term investment. Investing in Bitcoins Ethereum is a good choice when investing in digital currencies.
- In cryptocurrencies, you own your money, manage and maintain everything on your own there is no involvement of third parties.
- As it is decentralized it is safe and secure for long term investment.
12. Can you withdraw money from cryptocurrency?
- Yes, you can withdraw money from cryptocurrency.
- It can be taken be done by transferring money to an exchange or broker.
- The most popular exchange in the market to convert cryptocurrency to money is the wazirX app.
- The other easy way of doing it is through a peer-to-peer network. commonly used peer to the network is Local bitcoins.
13. How long does cryptocurrency withdrawal take?
- When the withdrawals are automated the withdrawal normally takes non more than 2 hours to get processed.
- If transactions are done through the wazirX app, it takes 4 to 6 days for processing your request
- Once you place a withdrawal request you will receive a confirmation mail on your mail id as means of acknowledgment and you need to approve it for further process.