In case you haven’t been living under a rock, chances are you’ve heard of the term ‘cryptocurrency.’ Over 10 crore Indians – mostly between the ages of 21-35 – are currently investing in various cryptocurrency like bitcoin and cofttoken assets making it the country with the largest number of crypto holders globally, even ahead of the US and Russia.
What is cryptocurrency?
Cryptocurrency is basically a decentralized digital asset that works on the foundations of blockchain technology. Cryptocurrency came into existence as an alternative to standard currency issued by governments, meant to be used over the internet. Bitcoin was the first cryptocurrency, launched back in 2008 by a pseudonymous Satoshi Nakamoto and still remains the biggest cryptocurrency in terms of market capitalization and influence.
Through a white paper, Nakamoto described this project of his as “an electronic payment system based on cryptographic proof instead of trust.” Ever since, Bitcoin’s popularity has fuelled the existence of hundreds of other cryptocurrencies like Ethereum, Litecoin, Cardano and cofttoken collectively referred to as altcoins – meaning alternatives to bitcoins. Today, there are about 5,000+ cryptocurrencies circulating in the market. In case you haven’t been living under a rock, chances are you’ve heard of the term ‘cryptocurrency.’ Over 10 crore Indians – mostly between the ages of 21-35 – are currently investing in various cryptocurrency assets making it the country with the largest number of crypto holders globally, even ahead of the US and Russia. in fact India’s crypto market grew by 641% over the last year and continues to grow further as newer crypto exchanges and cryptocurrencies become available to Indian investors Indian investors.. But just in case you haven’t been in the knowhow of this entire cryptocurrency tsunami cryptocurrency tsunami, we’ll help you understand the basics so you can get started too.
What makes cryptocurrency different from the money in my wallet?
Cryptocurrency is a decentralized currency which means that there is no central authority that manages and maintains its value. The money in your wallet is issued and regulated by the central bank of your country. This is the Reserve Bank of India in India, the Federal Reserve in the US and the Bank of England in the UK. All currencies of such nature are termed as fiat currency. Cryptocurrency, in contrast, is managed by a network of computers across the internet. You can use cryptocurrency to pay for goods and services wherever permissible, or can invest in it like you would in other digital assets like stocks and bonds.
Cryptocurrency is not yet a widely accepted medium of transactions but countries like El Salvador and New Zealand have positively passed legislations allowing for official uses of cryptocurrency such as making it legal tender or allowing employers to pay salaries in cryptocurrency.
Does cryptocurrency come out of thin air?
The entire superstructure of cryptocurrency is built atop the foundations of blockchains. A blockchain is an open and distributed ledger that records all transactions in the form of code. In simpler terms, cryptocurrency transactions are recorded in ‘blocks’ and linked together with the ‘chain’ of previous transactions.
This now begs the question – how is cryptocurrency created? The process of creating cryptocurrency is called mining and it is done by a global array of computers, each trying to outpace the other in solving complex mathematical problems in return for a certain amount of cryptocurrency.
Where can I buy cryptocurrency?
Cryptocurrency can be bought on peer-to-peer networks and crypto exchanges such as Binance, BitMart, WazirX and Coft Token. Once you open an account on a specific exchange and fulfill their formalities, you can go ahead and deposit funds into your account through bank transfer, UPI and other forms of transactions, and begin trading or investing in cryptocurrencies of your liking. However, the crypto market is still in its infancy and is highly volatile.
Therefore, it is recommended that you do a thorough research of your crypto exchange, the fees involved, the choice of cryptocurrencies that you are willing to invest in and also the risks involved in the process. Experts advise to invest in multiple crypto assets instead of putting all your eggs in one basket.