Cryptocurrency

A cryptocurrency is a digital asset based on a network that spans many computers.

Cryptocurrencies employ blockchain technology to guarantee decentralisation, transparency, and immutability. The most fundamental attribute of a cryptocurrency is that it is not controlled by a central authority. The decentralised nature of the blockchain allegedly renders cryptocurrencies immune to government control and regulation.

Cryptocurrencies have grown into a global phenomenon that most people are unaware of.

What is Blockchain?

A blockchain is a constantly increasing collection of data called blocks that are linked together via encryption.

We can safely store information over a shared system using blockchain, where everybody can see it, but no one can change it. Blockchain will keep track of all information transactions in a ledger and employ a distributed method to verify each transaction.

Different types of Cryptocurrencies

There are many different cryptocurrencies, but with over 17,000 (according to coinmarketcap) to learn. We've divided them into four groups, which are as follows:

1. Cryptocurrencies for Transactions and Payments

Payment Currencies are primarily used for payments. Payment currencies, for example, might be used to pay for products and services, pay bills, and cash out digital currencies into local fiat currencies like the dollar. Example: Bitcoin, Litecoin, Dogecoin.

2. Cryptos for Platforms and Architecture

Infrastructure coins are primarily used to compensate machines that run programs on a shared blockchain software network. For example, ether is a crypto asset which runs Ethereum, and it may be considered an infrastructure cryptocurrency because consumers purchase it in order to construct and use decentralised applications that operate on the platform.

Many blockchain systems offer various use cases, and each one necessitates its cryptocurrency infrastructure. Here are a few examples: Tron (TRX), Ethereum Classic (ETC)

3. Cryptocurrencies with use or financial value

Utility tokens are digital tokens that are utilised in conjunction with a blockchain-based product or service.

Example: Ripple (XRP), Polkadot (DOT), Chainlink (Link).

4. Entertainment and media cryptocurrencies:

These cryptocurrencies have the potential to transform several markets within media and entertainment. An example of this Cryptocurrency is Basic Attention Token (BAT) which can be used to tip content creators through Brave Browser or via other applications with BAT wallets. 

Pros and Cons of Cryptocurrencies

Pros

1. It is possible to Transfer funds between two people without the involvement of a third party, such as credit/debit cards or banks.
2. Compared to other online transactions, this is a less expensive choice.
3. Payments are safe and secure, and they offer unrivalled privacy.
4. The transfer of funds is handled with the least amount of processing fees possible.

Cons

1. The value of bitcoin fluctuates, and the rules for claiming it as taxable income are unclear.
2. Only a few businesses accept cryptocurrency. The money saved in transaction fees could be minimal due to this and shifting prices.