What is cryptocurrency?
Cryptocurrency is a digital currency that is maintained by blockchain technology. It uses digital entries in a public ledger to keep track of all the transactions.
How can you obtain cryptocurrency?
Cryptocurrency can be obtained by two methods. You can generate coins by the process of cryptocurrency mining. Mining is the method of using computers to solve complex problems that eventually produce coins.
Or, you can directly buy them from brokers and then spend them as you see fit.
Types of cryptocurrency:
1. Bitcoin –
It is the first cryptocurrency ever created. Founded in 2009, it is still the most popular form of cryptocurrency. Third-party organizations that can handle your bitcoin for you are known as bitcoin hosting centers.
2. Litecoin –
This currency shares the most similarities with bitcoin. But, it has evolved faster to enable quicker payments and other features.
3. Ethereum –
Founded in 2015, it is the second most popular cryptocurrency after bitcoin.
Impact of cryptocurrency on different Industries:
Some points that highlight how cryptocurrency has had a positive impact on different industries and the global economy as a whole:
- Cryptocurrency can help governments boost investments. They can become a perfect complement to the existing investments, and not a substitute for the current fiat. Moreover, the government’s tax revenue can increase by levying taxation rules on returns from these investments. This is only possible if cryptocurrency becomes more widely used and accepted. A lot of countries do not accept cryptocurrency as a valid form of currency yet.
- The advancement in cryptocurrency has given a boost to the technology industry generating newer employment options in research fields.
- Blockchain technology facilitates the direct transfer of information without the use of any intermediaries. These transactions are locked by digital signatures and are impossible to forge or fake. Thus, this reduces the cases of theft and fraud worldwide.
- Since private digital currencies do not fall under the purview of the monetary policy, they could be used as a tool to control the inflationary pressure in the economy.
Cryptocurrency could very well become the future of currency.