In the present time, especially during the pandemic, all businesses transferred to the digital market due to modern and efficient technologies. Currency exchange methods also revived as cryptocurrency. The question arises in minds of some beginners that what is a cryptocurrency and how it can be used as currency in the exchange market. So let’s move towards the simple definition of cryptocurrency.
What is Cryptocurrency?
Cryptocurrency is defined as a digital currency exchanged with goods, services and can be used for online trading. Most organizations or companies utilize this kind of online currency to earn profit without deduction of taxes and excise duties. You can say it is a direct and safe transfer of credit between buyer and trader without the involvement of any bank or finance house.
Types of cryptocurrencies used in the digital market
According to estimations of CoinMarketCap.com, there are more than 6,700 types of cryptocurrencies used in public trading and exchange. To get rid of traditional money exchange, many cryptocurrency dealers have introduced the following digital currencies to market. Here we are going through the top 10 cryptocurrencies used frequently in the online market.
Why are Digital currencies so famous nowadays?
Here we will discuss the most common facts that appeal to the consumers to buy and utilize cryptocurrency in their daily buying and deals.
- Some consumers understand the worth of cryptocurrencies like bitcoin which will increase in the future and help to earn profit in coming years.
- Other categories of consumers consist of those business tycoons who want to discard out the traditional and old methods of money exchange through banks. It promotes the direct exchange of currency between sellers and buyers to avoid trouble.
- Some of the traders have not interested in traditional currency and want to replace it with easy and quickly transferable cryptocurrency.
Are cryptocurrencies a good investment for the future?
There are plenty of aspects that justify cryptocurrency as a good investment for the future. Many investors suggest the value of cryptocurrencies like bitcoin as its worth will go up in the future. Some of them consider it not more than a myth. What might reason behind this? Let me explain that value of currency increase when it goes through cash flow. A profitable business allows the cash flow of currency to increase its value and stability in the market.
Only one thing that can increase the value of cryptocurrency is its high utilization to generate a cash flow and circulation in the market. The total worth of all cryptocurrencies by the 27th of Jan, 2021 is $897.3 billion that make Cryptocurrency attractive for future investors.
How do you buy cryptocurrency?
Cryptocurrencies like bitcoin are available in the US market, as someone who wants to buy should have to pay for it in US dollars. While other cryptocurrencies like Binance coin and lite coin are purchased through exchange with bitcoin.
Some of the cryptocurrencies can be purchased through “wallet” on the online app that utilizes money from your bank account or credit card.
Are cryptocurrencies safe and legal?
The most important question arises for buyers of cryptocurrency that either it is legal or not in their corresponding state. Its trade is legalized in the USA but banned in China. While buying cryptocurrency, make sure to stick away from fraudsters that want to blink investors.
How can you protect yourself?
While you are going to buy cryptocurrency, stick to the given points to protect yourself from scams.
- Through which company you are going to buy, the owner should be well reputed and well recognized in the market.
- What type of cryptocurrency you decided to buy, consider its worth in the market.
- The most important point of attention is either you will be owning a stake in the company or just buying currency or tokens for later use.