NaslovnicaKripto za početnikeWhat is a cryptocurrency?

What is a cryptocurrency?

What is a cryptocurrency?

A cryptocurrency is a digital or virtual currency that is protected by encryption, making counterfeiting and double-spending practically impossible. Many cryptocurrencies are built on blockchain technology, which is a distributed ledger enforced by a distributed network of computers. Cryptocurrencies are distinguished by the fact that they are not issued by any central authority, making them potentially impervious to government intervention or manipulation.

Cryptocurrencies are digital or virtual currencies that rely on cryptography technologies to function. They make it possible to make safe online payments without the involvement of third-party payment processors. Various encryption methods and cryptographic approaches, such as elliptical curve encryption, public-private key pairs, and hashing functions, are referred to as "crypto." They can either be mined or bought on cryptocurrency exchanges. Cryptocurrency purchases are not permitted on all ecommerce sites. In fact, even famous cryptocurrencies like Bitcoin are rarely used for retail purchases. Cryptocurrencies, on the other hand, have become popular as trading instruments because to their increasing value. They are also utilized for cross-border transfers to a limited extent.

The most traded and covered cryptocurrency is Bitcoin, which was first made available to the public in 2009. There were around 18.8 million bitcoins in circulation as of November 2021, with a total market cap of around $1.2 trillion. There will only be 21 million bitcoins ever created.

Following Bitcoin's breakthrough, a slew of new cryptocurrencies known as "altcoins" have emerged. Some are Bitcoin clones or forks, while others are brand-new currencies created from the ground up. Solana, Litecoin, Ethereum, Cardano, and EOS are among them. By November 2021, the entire value of all cryptocurrencies in existence had surpassed $2.1 trillion, with Bitcoin accounting for roughly 41% of that total.

Advantages of cryptocurrencies are:

- A cryptocurrency transaction is usually a simple and rapid process. Bitcoins, for example, may be exchanged between digital wallets using only a smartphone or computer.

- Every cryptocurrency transaction is recorded in a public ledger known as the blockchain. This allows people to follow the history of Bitcoins, preventing them from spending coins they don't own, copying transactions, or undoing them.

- Payments in cryptocurrencies are growing more popular among large corporations and in industries such as fashion and pharmaceuticals.

Disadvantages of cryptocurrencies are:

- Because the value of cryptocurrencies can fluctuate dramatically, some people are hesitant to convert real money into coins.

- There are no standards in place to protect your business because the crypto market is not regulated by the Financial Conduct Authority (FCA).

- It could lose value and become useless if firms or consumers switch to a different cryptocurrency from you or stop utilizing digital currencies altogether.

- Scams are a possibility with cryptocurrency.

Provjerite ostale razine

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