Cryptocurrency And Its Digital Nature
Hello Steem Alliance Community |
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Introduction |
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We all know what cryptocurrency is and reasons due to which its features are attracting people. Today in this blog we will discuss how digital coins is different from physical coins and what are its advantages and disadvantages.
Cryptocurrency is a digital money or coins that is secured by cryptography. Being secured by cryptography it is almost impossible to spend it twice, that is, there is no scope of fooling it. This cryptocurrency exists on a decentralized network using blockchain technology.
Difference In A Digital coin And Physical Coin |
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Physical money is that which we can hold in our hands. We can touch it. It is traded in the market. We can spend it as much as and whenever we want. We do not need the permission of any third person for this. When we have physical money, it does not tell us from where we got it.
In simple language when we have a physical property, it is ours and we have complete control over it. We can give it to anyone and spend it for our comforts and luxuries. We do not have to wait for anyone else's permission.
One of the biggest problems with physical money is that it is useless unless you take it to a third person, whereas digital currency is very different from physical currency because it is a place where there is trust between the person and the customers.
If we put it in other words, we cannot own digital currency and cannot control it directly. To own digital currency we need to open an account with someone or something like a bank wallet or a PayPal e-wallet.
Payments in cryptocurrency are made through specific transactions, in which the payment is entered in an online database. Whenever someone transfers cryptocurrency funds, this transaction is recorded in a public ledger.
Cryptocurrency gets this name due to the use of encryption in verifying its transactions. This means that advanced level coding has been used for storing the cryptocurrency in the wallet to the transaction. Bitcoin is the most famous and first cryptocurrency which started in the year 2009.
Many cryptocurrencies were created to facilitate work in the blockchain on which they are built.
Most of the time, when you hear about types of cryptocurrencies, you hear the name of the coin. However, coin names vary by coin type. Here are some of the types we'll find along with some names of the tokens in that category: Bitcoin, Ethereum's Ether, Ripple's XRP, platform tokens .
Advantages |
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Today people are getting inclined towards cryptocurrency. The biggest reason for this is that its maintenance is easier than other digital currencies . Secondly , its transactions are charged less whereas other digital services charge very high fees.
Its popularity is increasing rapidly and this is the reason why people want to make payments in physical form through it. The biggest reason is that the government has no control over this currency, there is no tax from the government and there is no accountability towards the government.
The transaction done in this is completely invisible as compared to other transactions . And because of this, it is impossible to know who owns the address.
Disadvantages |
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Because cryptocurrency is not practical yet, it has nothing to do with the reality of the market. So even today many people are not familiar with its process, they only know the name... they do not know the whole process, so they consider it a dangerous or risky investment because the governments of the whole world have their own views on cryptocurrency.
Some want to keep it legal, while some still agree because it is a completely digital process and its accounting is done digitally through blockchain technology. Due to the lack of speed control of the government, if any fund is sent to the wrong person, then it cannot be traced where it went and as a result that fund is lost.
Conclusion |
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Cryptocurrency is based on a public ledger called a blockchain, which keeps updated records of transactions of all currency holders. The process of generating cryptocurrency units is called mining, which involves solving complicated mathematical problems to generate coins using computers. Users can purchase cryptocurrencies using agents. Cryptocurrencies can be stored and spent using a cryptographic wallet.
A person or company does the mining work using powerful computers and through these, coins are transferred between token users and both are monitored and verified in the entire network.
Thankyou |
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India, 23.04.2024
@moyeon
Note:- moyeon, please try to write some unique topic this is very common topic and everyone has such basic knowledge about crypto.
Regards,
@theentertainer
Definitely from next time . Thanks for acknowledging it .
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Upvoted! Thank you for supporting witness @jswit.
Cryptocurrency, secured by cryptography, differs from physical money in that it exists digitally on a decentralized network. While physical money is tangible and under direct control, digital currency requires ownership through accounts. Transactions in cryptocurrency are recorded in a public ledger and encrypted, ensuring security. Advantages include low fees, privacy, and government independence, but lack of familiarity and governmental regulations pose challenges.