A cryptocurrency is a form of digital asset that can be used to make payments. It has various uses in the market today other than making payments. Like many people and large institutions invest in crypto as well. Both for the long term and short term. Then there are various Crypto Exchanges in the market, people also earn, by trading on cryptos. Since its inception in 2008, it has grabbed a huge market as a mode of payment. The reason it is so popular is that it works on decentralized blockchain technology.
Decentralized means it isn’t regulated by any Governments or institutions. Which helps large institutions to manage their finances flexibly without any regulatory body watching over its shoulder. Then it works on Blockchain Technology, which is cheaper and faster than the general payment modes used by people.
What is a Blockchain?
Now let’s try and understand how does Blockchain Technology work. Blockchains are nothing but a singular chain of Blocks, where all sorts of data and transactions can be stored. The blockchain network is set in chronological order and therefore any new data added to the chain is added in a fresh block. It is publicly available for everyone to see. Anyone can download the whole Blockchain from certain websites of any crypto. But that is how decentralization works, there is no Governmental authority to keep the ledger of transactions here. To avoid people from making any illegitimate transactions on the blockchain network there are miners. Miners hold the responsibility to verify every transaction that goes through the blockchain network. And as a reward for their work, miners receive crypto.
There are several key features of Blockchain as given below:
- Every transaction is inputted into a fresh block which is later attached to the previous one, forming a single chain network.
- Since every transaction comes on top of the newer ones. The transactions on Blockchains are irreversible and permanent.
- Blockchains are never controlled or managed by any single individual or institution. The whole chain can be viewed and accessed by anyone.
- Blockchains can store all kinds of data for the user. But the most common use of Blockchains is as the ledger of transactions.
- Blockchains are decentralized forms of databases. Where no regulatory body is present to manage the ledger of transactions. Making it convenient for the users to make transactions.
Who formed the first Cryptocurrency?
The common belief is that the first crypto is Bitcoin, created by “Satoshi Nakamoto”. He is a Japanese computer programmer, who developed the first and the most valued cryptocurrency, Bitcoin. Bitcoin valuation currently stands at $1.2 Trillion. The valuation gap between the second-largest Cryptocurrency and Bitcoin is almost three times. Bitcoin holds a monopoly in the crypto markets as a mode of payment. Then because of its gaining popularity, its network is usually too busy. Because of which it sometimes takes days to make some transactions through Bitcoins.
Also, to find out more about the most valued cryptocurrencies, you can click on this link.
Cryptocurrencies are gaining value at an amazingly high pace since their inception in the market. The total value of all the cryptos combined is around $2.5 Trillion. That is more than the combined value of Facebook and Google combined. And cryptos achieved this valuation within a decade. Several Governments are trying to ban crypto in their nations. And the majority of the nations still don’t have laws to regulate the crypto market. So, we can now conclude that crypto is still a developing asset. Though several large companies have agreed to accept payments for their products in crypto. And many are putting huge resources in developing the Blockchain technology. While cryptos like Ethereum have been doing business of providing Blockchain facilities to large institutions. For them to securely store information in the Blockchain network.