Cryptocurrency Basics

Cryptocurrency is decentralized digital money designed to be used over the internet. It uses a online ledger with strong cryptography to secure transactions. Cryptocurrency is based on blockchain technology.

What is Blockchain ?

Blockchain is a kind of database which differs from the conventional database in the way it stores information’s, It stores data in blocks which are then linked together. If a new entry occurs in database then a fresh block is assigned to that entry and that new block is linked with it’s previous chain.

Blockchains can be used to store different kind of information but the most common use so far is ledger of transactions.

Decentralized blockchains are immutable it means that the data entered is irreversible.

The First Cryptocurrency — Bitcoin

Satoshi Nakamoto in 2008 published a white paper Bitcoin — A peer to peer Electronic cash system described the used of peer to peer network. Nakamoto proposed a decentralized approach to transaction resulting in culminating the creation of blockchains. In a blockchain, timestamps for a transaction are added to the end of previous timestamps based on proof of work, creating a historical record that cannot be changed.

Bitcoin is a digital currency created in January 2009. It follows the ideas set out in Whitepaper by Satoshi Nakamoto. Bitcoin is the world largest cryptocurrency by the market capitalization.

The bitcoin system is a collection of nodes (also referred to as “Computers” or “miners”) that all run bitcoin’s code and store its blockchain. Metaphorically, a blockchain can be thought of as a collection of blocks. In each block is a collection of transactions. Because all the computers running the blockchain have the same list of blocks and transactions, and can transparently see these new blocks being filled with new bitcoin transactions, no one can cheat the system

Cryptocurrencies by Market Capitalization

More than 10K cryptocurrency are traded publicly as per coinmarketcap.com. Below are the top 10 cryptocurrency as per market cap on 11sep, 2021.

1. Bitcoin (BTC) — $859,827,908,270
2. Ethereum (ETH) — $390,751,982,382
3. Cardano (ADA) — $77,267,767,301
4. Binance coin (BNB) — $68,559,330,396
5. Tether (USDT) — $68,359,294,635
6. Solana(SOL) — $52,809,017,768
7. XRP — $50,136,406,988
8. Dogecoin (Doge) — $32,024,571,905
9. Polkadot (DOT) — $29,311,733,017
10. USD Coin (USDC) — $29,041,780,627

Cryptocurrency Investment tips :

Investing for the long term is the best investment strategy when it comes to crypto assets. Cryptos like Bitcoin and Ethereum have strong fundamentals and many use cases. As you might hear a lot in the crypto space, buy and hold your crypto for long term.

Start by investing small sums of money first and increase the investment after getting familiar with the arena.

Below are the strategies which can be used to get better returns in Cryptocurrency.

. Rupee cost averaging ( Viz SIPs in mutual funds)

· Balanced portfolio

· Unbalanced portfolio

· Profit reinvesting

Source: https://medium.com/@kishankumar247/cryptocurrency-basics-9b339512e078?source=rss——cryptocurrency-5