Cryptocurrency

What is cryptocurrency?

• Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions.
• Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers.
• The aim of encryption is to provide security and safety.

How does cryptocurrency work?

• Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders.
• Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins.
• Users can also buy the currencies from brokers, then store and spend them using cryptographic wallet.

Types and Largest cryptocurrency by market cap ?

1. Bitcoin (BTC)

• Price: $37,391
• Market cap: $731 billion

As the harbinger of the cryptocurrency era, Bitcoin is still the coin people generally reference when they talk about digital currency. Its mysterious creator — allegedly Satoshi Nakamoto — debuted the currency in 2009 and it’s been on a roller-coaster ride since then. However, it wasn’t until 2017 that the cryptocurrency broke into popular consciousness.

2. Ethereum (ETH)

• Price: $2,034
• Market cap: $241 billion

Ethereum — the name for the cryptocurrency platform — is the second name you’re most likely to recognize in the crypto space. The system allows you to use ether (the currency) to perform a number of functions, but the smart contract aspect of Ethereum helps make it a popular currency.

3. Tether (USDT)

• Price: $1.00
• Market cap: $89 billion

Tether’s price is anchored at $1 per coin. That’s because it is what’s called a stablecoin. Stablecoins are tied to the value of a specific asset, in Tether’s case, the U.S. Dollar. Tether often acts as a medium when traders move from one cryptocurrency to another. Rather than move back to dollars, they use Tether. However, some people are concerned that Tether isn’t safely backed by dollars held in reserve but instead uses a short-term form of unsecured debt.

4. BNB (BNB)

• Price: $229.77
• Market cap: $35 billion

BNB is the cryptocurrency issued by Binance, among the largest crypto exchanges in the world. While originally created as a token to pay for discounted trades, Binance Coin can now be used for payments as well as purchasing various goods and services.

5. XRP (XRP)

• Price: $0.6087
• Market cap: $33 billion

Formerly known as Ripple and created in 2012, XRP offers a way to pay in many different real-world currencies. Ripple can be useful in cross-border transactions and uses a trust-less mechanism to facilitate payments.

6. USD Coin (USDC)

• Price: $1.00
• Market cap: $24 billion

Like Tether, USD Coin is a stablecoin pegged to the dollar, meaning that its value should not fluctuate. The currency’s founders say that it’s backed by fully reserved assets or those with “equivalent fair value” and those assets are held in accounts with regulated U.S. institutions.

7. Solana (SOL)

• Price: $56.32
• Market cap: $24 billion

Launched in March 2020, Solana is a newer cryptocurrency and it touts its speed at completing transactions and the overall robustness of its “web-scale” platform. The issuance of the currency, called SOL, is capped at 480 million coins.

Cryptocurrency Charts & Market Data

Advantages and Disadvantages of Cryptocurrency

Cryptocurrencies were introduced with the intent to revolutionize financial infrastructure. As with every revolution, however, there are tradeoffs involved. At the current stage of development for cryptocurrencies, there are many differences between the theoretical ideal of a decentralized system with cryptocurrencies and its practical implementation.

Advantages

• Removes single points of failure
• Easier to transfer funds between parties
• Removes third parties
• Can be used to generate returns
• Remittances are streamlined

Disadvantages

• Transactions are pseudonymous
• Pseudonymity allows for criminal uses
• Have become highly centralized
• Expensive to participate in a network and earn
• Off-chain security issues
• Prices are very volatile

How To Use Crypto Wallets

A cryptocurrency wallet is a digital tool that enables you to store, send, and receive digital assets. 

For beginners, a software wallet, often referred to as a hot wallet, is generally recommended. This type of wallet is user-friendly and easily accessible through desktop or mobile applications. It also offers a familiar and convenient user experience, and usually comes with customer support. 

You can use hot wallets from crypto exchanges or download popular ones in the market, such as MetaMask. A hot wallet offers numerous benefits compared to your exchange account, including being able to do peer-to-peer transactions (without relying on an exchange) and exploring various decentralized finance (DeFi) services. 

What is the Price of Cryptocurrencies ? (2023)