What is CryptoCurrency? Explained


What is Cryptocurrency?

Cryptocurrency is basically a decentralised digital and virtual currency which is not regulated,  monitored or controlled by any supervising authority. The only thing that upholds our integrity is cryptography and blockchain technology. And this is exactly where crypto currency and technology comes together, through blockchain.

What is Crypto Currency? Explained

How does cryptocurrency work?

Blockchain and cryptocurrency, being two very different technologies, are very deeply intertwined and the digital money is able to function because of blockchain. Blockchain also developed further with the popularity of crypto even though it is used in many other areas. Blockchain is a collection of blocks, i.e., digital information that is stored across various computers to form a database. When transactions through crypto take place, they are added to these blocks which later on form a chain. These chains are protected and are difficult to manipulate. Many experts claim that blockchain technology has the power to change our lives in significant and multi-dimensional ways. It has potential for much more than just crypto and it is an innovative and miraculous way of storing data. It ensures then authenticity and protection of data and one of the most impactful uses we could attain out of it is as simple as storing sensitive yet personal data.

There are hardly a couple of things which attracted as much attention as the coronavirus and Cryptocurrency was surely one of them. With the first Cryptocurrency being introduced in 2009, the very famous Bitcoin, very few people knew or as much as cared about them. Then one day suddenly, the world was after these decentralised digital currencies and we could literally look at 800% surge in even satiric and ‘joke’ coins (read DOGE). A person who had invested in these as a part of some truth or dare game was now a millionaire and every newspaper had the same headline. A new trend was here and it was not some dance or meme, but a Laxmi chit fund-sure shotin a whip way of becoming rich, only difference being, this was actually legit.

Does this not seem too good to be true? Why don’t people buy 20$ worth of these coins, get rich and end poverty? Because these supposedly new age replacement for real, normal, everyday money were not really so. In Jan 2021, all these crypto currencies crashed leading to $134B losses. How did this happen? 

The distrust of governments and unstable market were the main culprits to blame. However, this opened investor’s eyes and the bitter truth of investment was realised yet again, that loss and gain are the two sides of the same coin.

Is Cryptocurrency worth investment? 

Yes, Cryptocurrency is an excellent investment opportunity and could be the boon for our generation or until the next quick money option emerges, but it comes with equally high-risk factors. With no regulatory body or no nodal authority, it is just a peer-to-peer network of transactions and the anonymity worries government and people alike. As of now, crypto can more easily be used for criminal activities rather than daily life transactions. With more developments, maybe a new age of virtual cash could come with crypto as safe as rupee and dollar, but today with the ever-fluctuating rates and such vague nature, further huge advancements are necessary. This tug of war situation is a part of the journey and at the end either Cryptocurrency will be a revolutionary idea or just a primitive prototype of virtual currency which taught quite a few lessons.

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