Figyan

A resource site for beginners with easy to understand income tax, gst, and finance tutorials for mastering the basics and beyond.

You are here: Home / Finance / Cryptocurrency

Cryptocurrency

Last modified on by

Cryptocurrency is a digital currency or asset that is secured by cryptography. It can be circulated without the central bank or government.

It’s a peer-to-peer system that enables everyone to send and receive payments over the internet without the need for a middleman like a bank or payment processor.

It enables secure online payments without the use of third-party intermediaries.

Cryptocurrency is stored in digital wallets.

As of today we have more than 15,000 cryptocurrencies that represent the entire crypto market.

All these cryptocurrencies run on a blockchain technology, or a ledger logging transactions distributed across a network of thousands of computers. When you transfer cryptocurrency, the transactions are recorded in a public ledger.

Here are top cryptocurrencies;

  • Bitcoin:
  • Ethereum
  • Litecoin
  • Dogecoin
  • Tether
  • Binance Coin

Bitcoin is the first and most popular cryptocurrency created by Satoshi Nakamoto.

Here are the important advantages and disadvantages of cryptocurrencies;

Advantages:

  • Cryptocurrencies eliminate centralized intermediaries, such as banks and monetary institutions.
  • Easier and faster to transfer funds directly between two parties, without the need for a bank or a credit card company.
  • As financial information is not shared with third parties like banks, government agencies and payment services, there is a very little risk of your financial information being compromised.

Disadvantages:

  • Cryptocurrencies have become a favorite of hackers. Crypto repositories, such as exchanges and wallets, can be hacked.
  • Many countries including Qatar, China, Turkey, Russia, Bangladesh and Egypt have banned or restricted use of Cryptocurrency.

In addition to the disclaimer below, please note, investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative. This article is not a recommendation to invest in cryptocurrencies or other ICOs. Before trading, investing or making any financial decisions in cryptocurrencies, we suggest you consult a qualified professional.