What is Cryptocurrency and what is its main purpose?
The 21st century is a really well and specifically developed modern world. It is literally a “Digital age“. A lot of things have been developed and invented to make our life easier and as amazing as possible. In this article, I will simplify what really “Cryptocurrency” is and what purpose does it have in the 21st century.
Cryptocurrency is like any other medium of exchange like money. We could also say that it is an “internet-based” medium of exchange or it can also be classified as a “digital asset“. Although it is a medium of exchange, it isn’t controlled by any authorities like the government hence, it is a decentralized currency. It is really a fast means of safe, untraceable and exchangeable money and is used globally by almost everyone. It can also be invested by an individual for profit as similar to doing business. The first-ever cryptocurrency was introduced in 2009, known as “Bitcoin“. Since then over 5,000 variants of the Bitcoins have been introduced to the world.
Now, just like how money is made out of special papers or blends of cotton and linen, cryptocurrency is obtained in three special ways. The first and second process of obtaining cryptocurrencies is through exchanging them with your money or accepting them for goods and services. The third way of obtaining it is known as “Mining“. Yes, just like mining the golds and silvers, cryptocurrency can also be mined. Cryptocurrency is decentrally stored and maintained in a publicly available ledger called the “Blockchain“.
The main purpose of cryptocurrency is to make the transactions cheaper and easier, to make the transactions more secure, to make transactions between individuals without needing to involve a financial institution as a “trusted third party”. Although there is a huge advantage of using cryptocurrency there are a lot of disadvantages too like being hacked, scammed, price volatility, etc. Although as of right now there are more demerits than merits on cryptocurrency, one day it could create a revolution, that could be a start of a new form of globalization, with limited taxation by countries, limited involvement in business and limited interference in peoples life. Stay tuned for another article as we post more information about trading, investing and mining of cryptocurrencies.
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