Cryptocurrency is a digital, encrypted and decentralized medium of exchange, which is almost impossible to counterfeit or double-spend. The word “cryptocurrency” was added to the Merriam-Webster Dictionary in March 2018.
According to CoinLore already there are more than 5,000 different cryptocurrencies in circulation.
You can use Cryptocurrency to buy assets, like stocks or precious metals as well as other goods and services.
However, cryptocurrency does not exist in physical form (unlike paper money) and there is no central authority monitoring its use over the internet. Cryptocurrency transactions are verified and recorded using a program called the blockchain.
A blockchain is like a ledger displayed across countless computers around the world that records transactions. Each transaction is recorded in “blocks” that is linked to a “chain” of previous cryptocurrency transactions.
Blockchains are highly secure, but other aspects of a cryptocurrency ecosystem, including exchanges and wallets, are not immune to hacking. Several online exchanges have been subject to hacking and theft, and coins worth millions of dollars have been stolen.
ADVANTAGES AND DISADVANTAGES OF CRYPTOCURRENCY
Cryptocurrencies make it easier to directly transfer funds between two parties, without the need for a third party like a bank or credit card company. As a result, the users don’t have to pay the fees charged by banks and financial institutions for wire transfers.
The anonymous nature of cryptocurrency transactions makes them ideally suited for illegal activities, like money laundering and tax evasion. Some investment gurus feel that cryptocurrencies are risky, volatile and speculative–hence advise would-be investors to steer clear of them.
STIL WHY ARE CRYPTOCURRENCIES POPULAR?
Here is why cryptocurrency are popular:
Cryptocurrencies such as Bitcoin have been called the currency of the future – almost as precious as gold. Hence people are racing to buy them before they become more valuable
Cryptocurrencies remove the involvement of central banks from managing the money supply
The blockchain technology and its decentralized processing and recording system makes it more secure than traditional payment systems