A cryptocurrency is a digital platform that is used for exchanging goods or services. This type of currency is digital, it is decentralized, and it is encrypted as well. Consider them the coins, tokens, or chips that you used to purchase when you were young for rides in the arcade. Unlike the regular currencies such as the U.S. Dollar or the Euro. There is no central authority that intervenes from time to time to maintain the value of those currencies.
But when it comes to cryptocurrencies, there is no central authority nor any medium that controls these currencies. Instead, these tasks for intervention and maintenance are distributed among the users over the internet.
Or you can say that a cryptocurrency is a digital asset that is based on a network. This network is distributed across a vast number of computers worldwide. This decentralized structure of Cryptocurrencies allows them to be in existence way beyond the controls of any government, or you can say any central authorities. In addition, you can also buy crypto currencies including bitcoin with bank accounts.
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Blockchain
Cryptocurrencies usually work by using a technology that is commonly known as a blockchain. Blockchain is a technology that is decentralized, and it is spread across several computers around the world that are responsible for managing and recording transactions. The most crucial part of the overwhelming success of this currency is its security.
Furthermore, Blockchains are an organizational method that ensures the integrity of any transaction data. These are considered as the backbone of many cryptocurrencies.
Cryptocurrencies
According to CoinMarketCap.com, there are almost 10,000 Cryptocurrencies currently prevailing and successfully trading in the market as of today. These Cryptocurrencies continue to proliferate by raising money through the process known as the initial coin offerings, or that goes with the acronym of ICOs.
Market Capitalization
The market capitalization of these Cryptocurrencies was at $1.55 trillion as of June 12, 2021. These Cryptocurrencies have seen a sudden downfall in their values as of April 2021. Due to which a considerable market capitalization was lost, making many bankrupt and out of business.
Cryptocurrency Market Capitalization
- Bitcoin $735.3 billion
- Ethereum $324.2 billion
- Tether $61 billion
- Binance Coin $57.5 billion
- Cardano $54.6 billion
- XRP $46.5 billion
- Dogecoin $44 billion
Popularity
The popularity of Cryptocurrencies gains an enormous amount of appeal with the passage of time. Now their supporters argue a number of reasons for supporting them. The most common are elaborated here for your convenience.
They foresee cryptocurrencies as the future, and they tend to purchase as much of these currencies within the short span of time before they become valuable and become out of reach.
The supporters of cryptocurrency welcome the removal of central banks from managing the supply of money. And as these central banks are out of reach, there are no chances that the value of money will ever decrease due to inflation.
The other main reason for supporting these cryptocurrencies is the technology of blockchain. This technology is a complete decentralized processing and recording system. With this being said, over time, they become more and more secure for making payments rather than the traditional systems.
Last but not the least, some prefer cryptocurrencies as there is no interest bearing on the money generated.