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| Crypto Currency: What is digital currency and how does it work |
Crypto Currency: Cryptocurrency is actually a means of financial transaction. Exactly similar to Indian Rupee and US Dollar, the only difference is that it is virtual and cannot be seen, nor can you touch it. That's why it is also called digital currency.
Cryptocurrencies remain the hottest topic of the present time. While its popularity has increased all over the world, the number of people investing in it has also increased in India. However, keeping in mind the risk in this unregulated market, the Government of India and the RBI have made preparations to crack down on private digital currency and a bill related to it is to be presented in the current winter session. Most people now have a desire to know about it, so we tell you what is cryptocurrency and how does it work.
What is digital currency?
Cryptocurrency is actually a means of financial transaction. Exactly similar to Indian Rupee and US Dollar, the only difference is that it is virtual and cannot be seen, nor can you touch it. That's why it is also called digital currency. Its entire business is done through online mediums only. While on the one hand, there is an intermediary between the currency transactions of any country, such as the central bank in India, but there is no intermediary in the trading of crypto and it is conducted online by a network. This is the reason why it is known as an unregulated market, which makes one rich in a jiffy and makes one fall on the ground in one fell swoop. But despite these ups and downs, its popularity is increasing.
key points
A cryptocurrency is a form of digital asset based on a network that is distributed among a large number of computers. This decentralized structure enables them to exist outside the control of government and central authorities.
The word 'cryptocurrency' is derived from the encryption technique used to protect the network.
Blockchains, which are organizational methods for ensuring the integrity of transactional data, are essential components of many cryptocurrencies.
Many experts believe that blockchain and related technologies will disrupt many industries, including finance and law.
Cryptocurrencies are criticized for a number of reasons including their use for illegal activities, exchange rate volatility, and the infrastructure underlying them.
Understanding Cryptocurrencies
Cryptocurrency systems allow for secure online payments that are denominated in terms of virtual 'tokens' that are represented by ledger entries internal to the system. Crypto refers to the various encryption algorithms and cryptographic techniques that protect these entries, such as elliptic curve encryption, public-private key pairs, and hashing functions.
Types of cryptocurrencies
The first blockchain-based cryptocurrency was Bitcoin which still remains the most popular and valuable. Today there are thousands of alternative cryptocurrencies with different functions and specifications. Some of these are clones or forks of Bitcoin while others are new currencies. Bitcoin was launched in 2009 by an individual or group under the pseudonym 'Santoshi Nakamoto'.
Most popular digital currency bitcoin
Currently, the world's most valuable and most popular cryptocurrency is Bitcoin. After this, talking about the second favorite cryptocurrency, the name comes of Ethereum. While talking about the top 10 digital currencies, include Polkadot, Tether, Litecoin, Dogecoin, and others. In the beginning, only Bitcoin dominated the crypto market, but over time this market grew and thousands of digital currencies came into circulation. Today, the scope of the crypto business has spread almost in most of the countries of the world.
Controlled by a computer system
In simple language, cryptocurrency is a type of digital cash system, which is linked to a private computer chain and built on computer algorithms. No country or government has any control over it. Its popularity is increasing so much that many countries have legalized it. In El Salvador, preparations have already begun to build a Bitcoin city focused on digital currency.
Used through blockchain
The system used to transact cryptocurrency is called a blockchain. These digital currencies are encrypted (coded). It is controlled through a computer network. In this, every transaction is verified by digital signature. Its record is controlled with the help of cryptography. All this work is done through a computer network. If there is a transaction in cryptocurrency, then its information is recorded in the blockchain, that is, it is kept in a block.
This is how cryptocurrency is bought
There are two ways to buy cryptocurrencies, but the easiest and most popular way today is to buy them through a crypto exchange. There are hundreds of cryptocurrency exchanges operating around the world. If we talk about India, there are many exchanges working here including WazirX, Zebpay, CoinSwitch Kuber, and Coin DCX Go. Apart from this, there are also international platforms like Coinbase and Binance from where digital currencies from all over the world including Bitcoin, ethereum, tether and Dogecoin can be bought.
Cryptocurrency exchanges are open 24 hours
It is quite easy to buy and sell bitcoin and other cryptocurrencies in the country. The most important thing is that all these crypto exchanges for shopping are open round the clock. The process of buying and selling crypto currency through them is also very easy. To start trading and investing in rupee crypto, you need to register on one of the exchanges. For this, after signing up on the site of the exchange, after completing its KYC process, money is transferred to the wallet and then these digital currencies can be purchased.
Preparing to introduce cryptocurrency bill
Significantly, in India too, the number of people investing in crypto is continuously increasing. According to a report, there are around 15 million (15 million) active users in India who are registered with one or the other crypto exchange operating in India. This is the reason why both the Reserve Bank of India (RBI) and the Central Government are strict in keeping in mind the safety of Indian investors in this unregulated market. A bill is also to be introduced in the winter session of the current Parliament to curb private cryptocurrency. Along with this, RBI has also given a proposal to the government regarding its digital currency.
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