Bitcoin is now the talk of every table. Recently, it crossed the 50 thousand dollar barrier. Many people use to think of it as a bubble that will burst anytime soon. It was in 2017 when bitcoin was reported on around 15 thousand dollars. 10 years before that, it was a couple of hundreds.
Bitcoin, at this moment, is the most dominating cryptocurrency. Unlike all the other traditional currencies, it does not hold any physical shape, coin, or paper. Everything is digital, based on numbers and algorithms. Hence, no central authorities or banking agencies are controlling it.
Moreover, there is a ledger that controls all the programming and track of cryptocurrencies called a blockchain. So, when you hear someone claiming to own a coin means that they have bought a coin. If you have little or no knowledge about cryptocurrency, bitcoin, and blockchain, you are in for a treat. Continue reading this article to know everything about it.
What is cryptocurrency:
It is a form of digital cash that can be used to exchange items. One important and significant feature is that it is not regulated by any bank. So, it is centralized and international, there is no duty or tax to exchange it.
There are many similarities as well as differences between crypto and normal money that we hold in our banks. Most of the people are only familiarized with bitcoin, Ethereum, or Doge because of their popularity. However, in general, there are 4000+ cryptocurrencies available. Not all of them worth thousands though.
How does it work:
Cryptocurrency works based on blockchain technology. A data is created based on the previous block and added to the chain, that is how blockchain works. We will talk about it in detail too. cryptocurrencies work on this technology, using the data and records the transaction of each coin.
Let us say if someone has 100 coins, he can only store it in a digital wallet i.e., cryptocurrency apps like Binance. Only that person has the password to that app. Hence, he can transfer or cash out the coin.
If he deals to transfer few coins and buy something in return. The user will have to transfer the coins into his digital wallet before. There are different ways of transferring depending upon the app you use.
The transaction record is kept by signing in form of providing the key before sending. It is verified from both sides via the app.
The record is added to the blockchain to keep a history.
The pros and cons of cryptocurrency:
If you are a fan of cryptocurrency or you have been following the news. You must have heard some bad and good news about it. Well, we have listed them below so you can evaluate your won and find out if it is a good investment or not.
Innovations and technologies do have a great effect on the entire world’s economy. Let us talk about what more it can do.
- Manage it yourself:
No one but you has the authority to sell, buy, or transact it from your account. Even if you keep it in your wallet for thousand years, no taxations will be applicable.
- Secure and authentic:
It is a safe and secure method of investment. Although, you must search about each coin before buying also check out the graph of its rise and dip.
- Fast and reliable:
Only these currencies can be transferred to any person around the globe without any third-party involvement. This makes it a quicker and more reliable currency.
Indeed, no single person holds the authority to grow or lower any coin. Although, the number of influencers and companies can change the value. For example, a simple tweet of Elon Musk about Tesla company not accepting bitcoin lowered the value to many percent.
- Can be hacked:
Either the app or any hackers from any part of the world can hack your account through any means. Unfortunately, several large groups and companies have been a victim to this.
- Fossil use:
The mining of bitcoin and Ethereum uses a huge amount of energy. This was one of the reasons Elon Musk gave about his car not accepting the bitcoin anymore.
What is blockchain:
For understanding blockchain, let’s break it down into simple forms. When you say blockchain, something strikes the mind that it has something related to blocks and chains. You are right at some point. This technology works as few blocks connecting to the previous ones in a manner that a chain is formed. Although, the new ones are relevant to the previous ones to attach. “The Hash” is like the basic atom of a blockchain block.
So, when there is a change in block, hash changes. Hence, if someone messes or changes a block, they change its hash and hence the previous block gets the signal. In that way, the person who owns the previous version gets notified or it is saved in the memory.
This manner is a great way of making cryptocurrency more reliable and trustworthy. Proof-of-work is also another level of security for it because obviously, you can not just rely on one.
Another part is the explanation of blockchain is the peer-to-peer (p2p) network. This means that instead of changing the whole hash, one person can transfer it to another.
How useful blockchain technology is:
We have already talked and discussed how useful it is for the whole idea of cryptocurrency. Now, let us talk about non-crypto uses of blockchain technology:
Transferring money is now safer and easier.
Keeps a record of all the transactions.
Hacking is quite difficult.
It creates smart contacts:
So, this concludes our topic for cryptocurrency, bitcoin, and blockchain technology. We now know for sure that there are multiple uses of blockchain technology in the digital world. If you are now stressing over all the technology talks, you can enjoy a life with pets. No worries if your landlord does not allow pets. You can always get an emotional support animal letter online. Visit getyourpetcertified to know more about ESA.
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