What is Cryptocurrency? Pros & Cons explained
Cryptocurrency is a digital currency in which transactions are verified with records maintained by a decentralized system.
using cryptography, rather than a centralized authority like a bank. Cryptocurrency is also a form of payment that can be exchanged online for goods and services. Many companies and brands have issued their own currencies, often called tokens, and these can be traded specifically for the goods or services that the company or brand provides. Cryptocurrencies work using a technology called blockchain.
What are the benefits of investing in crypto?
• Easy transactions
• Massive returns
• Access to a wide range of investment opportunities
• Direct control over investments
• Inflation hedge
• Cross-border payments
• 24/7 markets
These are the TOP reasons
people invest in cryptocurrency
• Massive returns
• Cross-border payments
• Direct control over investments
• 24/7 markets
top reasons other people avoiding cryptocurrency
- Volatility. The value of national fiat currencies such as the U.S. dollar fluctuates slightly. The …
- No rewards. Consumers use credit cards, in part, to earn cash-back and point-based …
- No consumer protection. Chargebacks are expensive and time-consuming for merchants. …
- Not universal. Cash is universal. Credit and debit cards are universal. Cryptocurrency is not.
Cryptocurrency history
In 1983, American cryptographer David Chaum conceived of a type of cryptographic electronic money called ecash.[15][16] Later, in 1995, he implemented it through Digicash,[17] an early form of cryptographic electronic payments. Digicash required user software in order to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient. This allowed the digital currency to be untraceable by a third party.
In 1996, the National Security Agency published a paper entitled How to Make a Mint: The Cryptography of Anonymous Electronic Cash, describing a cryptocurrency system. The paper was first published in an MIT mailing list[18] and later in 1997 in The American Law Review.[19]
In the 1997 book The Sovereign Individual, the authors, William Rees-Mogg and James Dale Davidson, predict that the currency used in the information age would be using “mathematical algorithms that have no physical existence”,[20] which has led some in the cryptocurrency community to call the book’s claim a “prophecy”.[21]
In 1998, Wei Dai described “b-money”, an anonymous, distributed electronic cash system.[22] Shortly thereafter, Nick Szabo described bit gold.[23] Like Bitcoin and other cryptocurrencies that would follow it, bit gold (not to be confused with the later gold-based exchange BitGold) was described as an electronic currency system which required users to complete a proof of work function with solutions being cryptographically put together and published.
In January 2009, Bitcoin was created by pseudonymous developer Satoshi Nakamoto. It used SHA-256, a cryptographic hash function, in its proof-of-work scheme.[24][25] In April 2011, Name coin was created as an attempt at forming a decentralized DNS. In October 2011, Litecoin was released which used script as its hash function instead of SHA-256. Peercoin, created in August 2012, used a hybrid of proof-of-work and proof-of-stake.[26]
On 6 August 2014, the UK announced its Treasury had commissioned a study of cryptocurrencies, and what role, if any, they could play in the UK economy. The study was also to report on whether regulation should be considered.[27] Its final report was published in 2018,[28] and it issued a consultation on crypto assets and stable coins in January 2021.[29]
In June 2021, El Salvador became the first country to accept Bitcoin as legal tender, after the Legislative Assembly had voted 62–22 to pass a bill submitted by President Nayib Bukele classifying the cryptocurrency as such.[30]
In August 2021, Cuba followed with Resolution 215 to recognize and regulate cryptocurrencies such as Bitcoin.[31]
In September 2021, the government of China, the single largest market for cryptocurrency, declared all cryptocurrency transactions illegal. This completed a crackdown on cryptocurrency that had previously banned the operation of intermediaries and miners within China.
cryptocurrency purpose
The primary purpose of cryptocurrency is to overcome the prevalent issues with traditional currencies by giving the control back over to the currency holders as opposed to a monetary authority. Cryptocurrency decentralizes money by not requiring centralized arbitrators, like banks, that oversee transactions.
Why Cryptocurrency Is a Good Investment?
High growth potential. Cryptocurrencies generate higher potential returns than other asset Legitimate asset class. Digital currencies are no longer a novelty or a niche Portfolio diversifier. There is a common saying among investors – don’t put all the eggs into one basket Hedge against inflation Highly liquid market
Conclusion
Portfolio diversifier. There is a common saying among investors – don’t put all the eggs into one basket, that means invest what you can afford to lose.
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