Cryptocurrency

What is Cryptocurrency?

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Cryptocurrency is a digital currency that uses blockchain technology to facilitate secure transactions. The main difference between digital currency and physical currency is the absence of any regulatory authority or centralized financial system. It is an online system of exchange that does not need banks for its functionality. Cryptocurrency does not know boundaries. Anyone from any part of the world can send and receive payments to any corner of the earth.

Crypto payments are purely digital in nature. All the transactions are recorded in a public ledger. The digital currency is stored in crypto wallets with a unique address like a bank account number. It is a highly-encrypted currency because it verifies all transactions by means of advanced coding and transmitting digital information among different crypto wallets and public ledgers. The encryption ensures the safety and security of all transactions.

How does Cryptocurrency Work?

Cryptocurrencies are based on blockchain technology which is a distributed public ledger. The records of all amendments within the digital transaction remain intact, and the owner of the currency cannot be changed.

The new units of crypto are produced through a process called mining. Mining is using computer software to solve complex mathematical problems to generate crypto coins. Investors can purchase these coins from brokers or trade them in decentralized exchanges by using crypto wallets.

Pros of Cryptocurrency

Cryptocurrency is a whole new world of opportunities and growth. Although it is a recent invention, it has the potential to alter the present course of the financial world. With its transparency, speediness, and security, it offers to explore a lot more than what is currently known. Let’s look into some of the advantages of cryptocurrency.

Abnormally High Profits

There are 13,000 or more cryptocurrencies in the crypto world today with their varying nature. Apart from the difference, each digital currency has the potential to gain higher returns for its investors. Since cryptocurrencies are not governed by a central authority, there are certain factors that determine the price of crypto, apart from the traditional market forces concept.

Highly Secure

Cryptocurrencies are based on blockchain technology which makes them inherently secure. Once a transaction is made on the blockchain, its records are impossible to be amended or erased. Moreover, it is less susceptible to hackers because all information in the blockchain is stored in different encrypted blocks, and a hacker cannot hack them all.

A Transparent Financial System

One of the distinguishing features of cryptocurrency is that the transaction history can be viewed by anyone and from anywhere in the world. The whole process of payment is transparent, unlike a centralized system of payment where one or more intermediary parties are involved.

24/7 Trading

Cryptocurrencies are not registered on stock exchanges; therefore, crypto investors do not have to wait for the exchanges to start trading. Simply when a coin is mined, the transaction is recorded, and one can start trading, selling, and buying. Hence, crypto is available 24 hours to trade.

Cons of Cryptocurrency

Cryptocurrency is not the best bet for risk-averse investors. It is a risky investment because of its high volatility. The volatility of cryptocurrency depends on factors such as coin circulation, supply, demand, exchanges, etc. Moreover, it requires quite an effort to understand some of the concepts of crypto to make an informed decision. Although cryptocurrencies are free from third-party intervention, they are completely free from fraud risks and scammers. For instance, if an owner loses his or her private key then someone else will have access to your funds and you can lose everything!

Moreover, misinformation about cryptocurrency and fake company profiles often deceives potential investors in the crypto and DeFi space. Therefore, the Empire Token team is continuously working on making DeFi a scam-free space. The series of educational blog posts and informational videos on Empire.blog and Empire’s social media pages aims to keep the DeFi community well-informed, helping them avoid scams and equipping them with the knowledge and tools they need to make better financial decisions.

Final talk

Cryptocurrency is a new paradigm shift for earning profits. It aims to achieve faster, more transparent, and better payment methods. However, cryptocurrency is comparatively a new currency based on speculations. These speculations make this currency somewhat risker, especially for newbies. But experience and effort can help overcome the darker side of cryptocurrency and to a better future for everyone.