The word “cryptocurrency” is derived from the encryption techniques which are used to secure the network. A cryptocurrency is a digital asset that is secured by cryptography. Primary functions of cryptocurrency is to work as a medium of exchange. Decentralized means that cryptocurrencies cannot be controlled by a single entity and does not rely on any central authority. All crypto transactions are verified by the network nodes and confirmed transactions are permanently recorded in a Block chain.

Bitcoin is the first cryptocurrency, is a decentralized form of digital asset/cash that eliminates the need for intermediaries like banks and governments to make financial transactions fast and secure.

Bitcoin

Bitcoin is a virtual currency, or cryptocurrency, that is controlled by a decentralized network of users and isn’t directly subject to the whims of central banking authorities or national governments. Although there are hundreds of cryptocurrencies in active use today, Bitcoin is by far the most popular and widely used – the closest cryptocurrency equivalent to traditional, state-minted currencies.

Blockchain

A blockchain is a computer file used for storing data information. It stores transaction data in blocks linked together to form a chain and that is where the name blockchain comes from. A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered. Blockchains are used for payment processing and money transfer, for monitoring of supply chains, digital IDs, for data sharing, for Internet of Things network management and for healthcare, provided the mathematical algorithms are solved.

Types of Cryptocurrency

The first block chain-based cryptographic money was Bitcoin, which is still generally well known and significant. Today, there are a huge number of substitute digital forms of money with different capacities and determinations. A portion of these are clones of Bitcoin, while others are new monetary forms that were worked into the system without any preparation.

A portion of the contending cryptographic forms of money brought forth by Bitcoin’s prosperity, known as “altcoins,” incorporate Litecoin, Peercoin, and Namecoin, just as Ethereum, Cardano, and EOS. Today, the total estimation of all the cryptographic forms of money in presence is around $214 billion.

Properties of Cryptocurrency

1. Irreversible: Once a transaction is done, it cannot be undone/reversed.
2. Pseudonymous: Neither exchanges nor accounts are associated with genuine personalities. Bitcoins are received on purported addresses, which are haphazardly appearing chains of around 30 characters. While it is typically conceivable to dissect the exchange stream, it isn’t really conceivable to associate this present reality personality of clients with those addresses.
3. Fast and Global: Exchanges are spread about right away in the system and are affirmed in two or three minutes. Since they occur in a worldwide system of PCs they are totally uninterested of your physical area.
4. Secure: Digital currency reserves are secured on an open key cryptography framework. Only the proprietor of the private key can send cryptographic money. Solid cryptography and the enchantment of huge numbers make it difficult to break this plan. A Bitcoin address is more secure than Fort Knox.
5. Permission less: We don’t need any permission to use cryptocurrency. It’s a software which can be downloaded by anyone and once installed can be used freely for sending and receiving Bitcoins.

Advantages of Cryptocurrency

• There are a lot of advantages of using cryptocurrency like any person can do a transaction anywhere around the world within seconds without paying hefty charges to any bank.
• There is no need for central regulations like the banks or government. It is in digital form so that it can be carried away anywhere without fear of theft, robbery.
• You only need to store it in your personal wallet and have to remember the keys.
• Transaction fees are lower when compared to banks and processing of payment is faster

Disadvantages of Cryptocurrency

• There are no physical coins and notes to encash and difficult to recoup any equalization in the event of a framework crash.
• Cryptocurrencies experience a great deal of vacillation and this can prompt the market being unpredictable implying that a ton of cash can be lost or picked up inside a brief period.
• The possibility of a robbery is exceedingly resolved with the presence of programmers and the costs connected to the monetary forms.
• A payment cannot be made if the opposite party doesn’t have the designated crypto wallet.
• If the passphrase is lost, we may be locked out of our accounts. If we are not being careful, our crypto currency can be stolen.

Conclusion

Cryptocurrencies are trending in the global financial system. There is great volatility of cryptocurrencies exchange rates. With this, there is a high risk of trading these currencies. Their growth has been able to gain the attention of many speculators. They are easily portable.

They are still in their early days, and it is not sure as to when they will be maturely traded in the markets globally. Many different cryptocurrencies have gained the required attention. It is quite possible that shortly, the bitcoins might have a way for cryptocurrencies to flourish. It has provided an alternative currency for the less developed countries and has opened the doors of economic transformation. In this way, it gives the individuals more choices to manage their finances.