Cryptocurrency is a virtual/ digital currency which is mainly designed for some important motives such as:
- In transaction process, to function as a medium of exchange
- To exchange digital information.
- Use the encryption to keep secure the whole process.
The complete process has been made possible by particular principles of cryptography. Each cryptocurrency functions through distributed ledger technology.
What are benefits of Cryptocurrency?
Data Protection: Bank and central authority can tap every individual’s data whenever they want, without taking that person’s permission. Today we are living in a world where no respect for our privacy is found. But in cryptocurrency, the whole transaction happens on the push basis. If you don’t wish to give additional information in your whole transaction, cryptocurrency allows you this luxury. So, you have complete control over your data. Isn’t it great? Cryptocurrency retains your privacy and freedom.
Easy International Transaction: Whenever an international transaction is created through banking or other mediums, it is influenced by exchange rates, transaction charges, interest rates which is imposed by a particular country.
But in cryptocurrency, the transaction can be done easily using peer-to-peer networking. Other catalysts like currency exchange fluctuations won’t create any complication in your trade.
Hack-proof: The primary feature of virtual currency is their blockchain technology. It is the lifeblood of every transaction. Whenever a transaction is created, all of the information is updated. Allow me to explain through an example:
Maria rents an apartment from rhea. Maria is planning to pay the rent through her bank. For the payment process, now she has to trust her bank for the transaction. She has to hope, it doesn’t steal her money or didn’t get hacked. So, the complete process does not look secure.
Instead of it, in the blockchain, Maria can directly send the money to Rhea. Once the transaction is done, the information would be updated. Everyone in the network including Maria and Rhea can see the money. It would be completely secure, no third party needed for the transaction. Even if any hacker tries to hack the computer, he has to hack all the computers in the network which is basically impossible.
What are widely used cryptocurrencies?
There are hundreds or thousands of coins available on the market. But all of them are not equally popular nor widely used. Among them, Bitcoin, Ethereum, Litecoin, Ripple, Lumen are widely used.
Bitcoin: Bitcoin is the most popular innovative virtual currency which is known as the first decentralized & also partially anonymous currency built on cryptography & peer to peer networking.
Ethereum: Ethereum is an open source, decentralized blockchain platform which features smart scripting functionality. It gives the users complete control over their own data. It’s becoming equally popular like bitcoin. Ethereum’s blockchain technology makes use of smart contracts which have been explained in this post.
Litecoin, Ripple and Lumen: Other favorite trades which highlighted in the recent time are Litecoin, Ripple, and Lumen. They enjoy positive movement in recent time and also have a good impact on investors.