Cryptocurrency has gained momentum in the past couple of years and has become quite a phenomenon. However, despite its popularity, many people do not know what cryptocurrency is. Today, we are going to discuss a few essential things you need to know about crypto.
What is crypto?
A cryptocurrency is a form of digital asset or virtual currency designed to use decentralized technology to process payments and store money. The decentralized technology that is used is known as the blockchain. With the use of blockchain technology, each transaction is secured, and it is recorded accurately. The defining feature of cryptocurrency stems from using an online ledger with robust cryptography to secure online transactions. Cryptography refers to a method of obtaining users’ information by using complex codes. It ensures that the information shared can only be read and processed by the sender and the recipient.
Why is it attracting so many users?
Many users find cryptocurrency appealing because blockchain technology eliminates the need for central institutions. It allows transactions to take place freely without the use of a bank. Eliminating the third party also enables user transactions to be instantaneous. For example, transactions of any amount can be completed in seconds. This applies to transactions that are occurring domestically and internationally. Eliminating centralized entities gives users complete control of their money and the freedom to do as they see fit without relying on a third party. Such as the dollar, many merchants are now accepting cryptocurrencies as a form of payment for their goods and services. Many crypto users argue that the use of blockchain technology is what gives them the security that their transactions are safe and protected.
Regulation Concerns
While many users are attracted to crypto because it is decentralized, new investors are hesitant to join due to its lack of regulations. Many share concerns that cryptocurrency is unsafe and its outcomes are unpredictable. Some believe that regulating crypto will provide a safe and controllable environment for investors. It is worth noting that the United States government is still struggling with creating regulatory guidelines for cryptocurrency.
I hope this post gave you some new insights into what cryptocurrency is. Do you have any concerns about investing in crypto? I would love to read your thoughts on this; share in the comments below.
